S Corporation Laws and Rules
What is a S Corporation?An S Corporation is used for the United States federal income tax purposes. This is a corporation in general do not pay for any federal income taxes. The corporation’s incomes or losses are all divided and passed all the shareholders. The shareholders are then supposed to report all income or loss on their own income tax returns.
How does someone set up an S Corporation?The laws on setting up an S Corporation often vary from state to state.
First the individual will need to pick a corporate name;
Next the individual will need to decide what type of corporation they are wanting to set up, either it be a nonprofit or a profit corporation;
The individual will also need to decide how the corporation will be ran and how much stock is going to be issued;
The operator will need to come to a decision on how many directors are going to be involved;
A draft will need to be made and be approved by the corporate bylaws;
One will need to hold a directors meeting that will address confirmation of a registered agent, stock certificates, etc;
Receive a federal tax ID number;
Issues all tax certificates to all shareholders;
And finally address any other legal requirements.
If someone is a single owner of an s corporation are they required to file corporate minutes?The single owner does not need to file any corporate minutes, but simply keep all minutes in a corporate book. In a corporate book there are many pages for the individual to note to note the minutes of any meeting that were held. It is not difficult for a single owner of an S Corporation to not have minutes of the meetings, now with that being said all corporations need to have meetings off all meetings. If the individual is behind on their minutes from the previous meeting, simply write all the topics that were addressed, the dates and put them in the book as well.
Legally how can someone transfer a nonprofit company and all the assets over to a 501-C3?In order to make this switch the owner will need to make sure that the new corporation is not only formed but also has a tax exempt status. In order to receive an exempt status the owner will need to file with the IRS and get a certain approval. Once this is completed the owner can remove the s corporation from the deed and create a new lease for the nonprofit company. The employees then can be transfer over to the new company. Now if there is an employee benefit plan or profit sharing, the owner will need to combine the old plan into any new plans to avoid all employment plans becoming vested. All previous contracts will need to be assigned to the new company. The owner will need approval of the contacts to make an assignment. The owner will need to make sure that any income from the lease is enough to cover any IRS issues.
How would someone go about closing an S Corporation in the state of Minnesota?In order to close a corporation under the Minnesota law the owner would need to file a Notice of Intent to Dissolve with the Secretary of State. The information that will be asked includes: the name of the corporation, the date the dissolution was official, and the manner of the agreement regarding the motion to dissolve. This form must be signed by an authorized representative of the corporation. This must also include the name, phone number and email address of the corporations contact person. There are many online sites that this form can be downloaded at. This form must be send to the Business Services Division of the Minnesota Secretary of State’s office along with a filing fee. After the above has been completed, the owner will then need to file a 966 Form which is a Corporate Dissolution or Liquidation with the IRS and file the corporation’s final tax return.
The above top asked questions relating to S Corporation are answered by Experts online. After reading the above material, if you are still in question about an S Corporation or the S Corporation laws, do not hesitate to contact one of the thousands of Experts for further legal information.