S Corporation Election

How to Make the S Corporation Election

All S Corporations begin their lives as C Corporations–no Secretary of State in the US makes a distinction between S Corporation and C Corporation. The S Corporation election is just that: an election.

The S Corporation Election is made by filing IRS Form 2553 before the expiration of the 15th day of the third month of its tax year (i.e. March 15 for most folks). If you are late, don’t fret, but get on it, there is a special precedure, but you’ll need to beg–search the net for that info if you need it.

Elegibility for S Corporation Election

But before you file for S Corporation status, make sure your corp is eligible; the corporation must:

• Have 100 or fewer shareholders.
• Be a US corporation.
• The shareholders can only be live people, estates, and limited types of exempt organizations (i.e., no C Corps can be shareholders.
• No nonresident alien shareholders.
• Only one class of stock.
• Not a bank, insurance company, professional corporation.

To file your election, use the instructions to Form 2553 here, and file the election form which you can find here.

Michael Spadaccini

Michael Spadaccini is the author of 8 books on self-help legal matters such as, Ultimate LLC Compliance Guide: Covers All 50 States (Ultimate Series), Ultimate Book of Forming Corps, LLCs, Partnerships & Sole Proprietorships, and Ultimate Guide to Forming an LLC in Any State, Second Edition (Ultimate Series).

You can view his Amazon Author Profile Here.