How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Richard Your Own Question
Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 54312
Experience:  32 years of experience practicing law and a businessman.
17027240
Type Your Business Law Question Here...
Richard is online now
A new question is answered every 9 seconds

I have a sole propietorship named after myself (first and last

This answer was rated:

I have a sole propietorship named after myself (first and last name). It has its own EIN number. Can I own shares of an S-Corp with this Sole Propietorship? I understand the shareholders of an S-Corp must be individuals, but I wonder if a sole propietorship is treated the same as an "individual". Please let me know if this assumption is correct, or if I need to sign for the shares using my SSN number instead. Thanks!

Good afternoon. You can sign for the shares as your sole proprietorship, but it's really simply semantics...if you do, then it will go on your Schedule C of your tax return...but you can use the EIN if you so desire.

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break.

 

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

 

Customer: replied 5 years ago.
Thanks for the quick answer. I also understand that if an S-Corp may also sell shares to a single-owner LLC, but by doing so, would lose its S-Corp status and be treated as a C-Corp instead. Is the same true if it sells shares to a sole propietorship? Or, more generally, is there any risk of impact to the S-Corp's status by selling shares to my sole propietorship? Thanks!

You and your sole proprietorship is really one and the same...it is not considered a separate entity so it will not contaminate the S Corp.

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break.

 

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

 

Customer: replied 5 years ago.
Okay, just one more question: I understand there is a 15% self-employment tax for sole propietorships. Will I have additional tax liability for this income? (i.e. will it be added to my personal income and therefore double-taxed?)
No...this won't be subject to that...no worries.
Richard and 4 other Business Law Specialists are ready to help you

Related Business Law Questions