Starting an S Corporation (S Corp) online offers a streamlined path for eligible businesses seeking potential tax advantages. An S Corp is a special tax designation by the IRS, not a business structure type like an LLC or C Corp. To become an S Corp, a business must first be formed as a state-recognized entity, typically an LLC or a C Corp. Once established, the entity can elect S Corp status by filing Form 2553, 'Election by a Small Business Corporation,' with the IRS. The process of starting an S Corp online involves several key steps, beginning with forming your base business entity (LLC or C Corp) in your chosen state. This initial formation is crucial as it establishes your legal business structure. Following this, you’ll need to ensure your business meets the IRS eligibility requirements for an S Corp. This includes limitations on the number and type of shareholders and the nature of the business itself. Finally, you submit the S Corp election to the IRS. While the core formation happens at the state level, the S Corp election is a federal tax matter.
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