In this episode, we will take a closer look at the particularities of what it means for an LLC to take an S-Corp election.

Highlights

• Why an LLC with S-Corp election is advantageous for solopreneurs or small business owners
• In-depth breakdown of the four things to consider for any corporate structure
• How the S-Corp election affects member classes and its potential implications to business growth plans
• How taxation rules change with S-Corp election
• The two tax deadlines for LLC with S-Corp election
• Different steps to execute an S-Corp election
• IRS requirement for business owners to pay themselves a 'reasonable salary' with an S-Corp election
• Personal experience about the positive impact of the 'reasonable salary' requirement on self-valuation

Episode Resources

• Book Recommendation: Overcoming Underearning - https://www.amazon.com/Overcoming-Underearning-TM-Simple-Richer-ebook/dp/B000W93AH4
• IRS Form 2553 - https://www.irs.gov/pub/irs-pdf/f2553.pdf
• Connect with Krystal Williams
• https://providentiagroup.com 
• https://www.linkedin.com/in/krystaldwilliams  

In this episode, I do a deep dive into different corporate structures and the factors a business owner should consider when choosing a structure that's right-sized for their business.

 

Highlights

• First factor in choosing the right corporate structure: how many owners are there?
• Second factor: personal liability exposure or limitation of liability.
• Introduction to the term 'limitation of liability'.
• Third factor: taxation.
• Fourth factor: corporate record keeping or corporate formalities.
• Discussion of sole proprietorship as a type of corporate structure.
• Overview of the importance of documentation in a general partnership.
• Explanation of deductions in an S corporation versus a C corporation.
• Explanation of taxation with an LLC.
• The need for an Employer Identification Number (EIN) for an LLC.
• Explanation of circumstances where an S-Corp election would be beneficial.
• Explanation of why serial investors prefer the C-Corporation structure for their investments.
• Assurance that changing corporate structure (from LLC to C-Corporation) is possible with legal assistance.

 

Episode Resources

• IRS Form 2553 - https://www.irs.gov/forms-pubs/about-form-2553
• IRS Form 8832 - https://www.irs.gov/forms-pubs/about-form-8832
• Learn about EINs - https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers
• Free Online EIN Application - https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
• https://podcasts.apple.com/us/podcast/unhire-me-legal/id1728670993
• Connect with Krystal Williams
• https://providentiagroup.com  
• https://www.linkedin.com/in/krystaldwilliams  

Unhire Me Legal is a beacon of empowerment for micro to mid-size business owners. With a tone that's both professional and relatable, this series cuts through legal complexities, offering clear, actionable guidance. Hosted by Krystal Williams, whose unique blend of emotional intelligence and legal acumen has defined her career, the podcast demystifies legal challenges, encouraging entrepreneurs to harness their critical thinking skills for legal decision-making. Each episode is a blend of insightful legal strategies and a deep understanding of the unique hurdles faced by diverse businesses. Unhire Me Legal is not just about learning the law; it's about integrating legal know-how into the fabric of business growth and success. Join us as we navigate the legal landscape with clarity, wit, and a touch of subversion, all while building a community of legally empowered entrepreneurs.