What to Keep in Mind During Your First Year as an S Corp

 

One available option is the S Corp. An S Corp is often thought to be a type of corporation, but in actuality it’s a C-Corporation with an S-Corporation tax election. Upon declaring this election, the federal government knows to tax this business as a partnership instead of a corporation. By being taxed as a partnership, the business is only taxed at the shareholder level. Lots of business owners opt for the S Corp option because of the limited liability protection, the ability to raise money by selling shares, and to gain credibility.

 

If this is the entity you feel suits your business best, here are four things to keep in mind during your first year as an S Corp.

 

 

Your minutes are important not only so that the state can make sure that everything’s in order, but because they’re a great organizational tool for your business as well. It can be easy to get distracted with the quotidian duties of running a business, but minutes can really keep your business on track. Minutes are great to measure the progress and the larger decisions your business has made throughout the year. You can also keep the minutes to help keep all your shareholders up to date too.

 

 

As they are investing in your business, it’s essential to keep your shareholders updated on what’s going on. This doesn’t have to be a formal weekly meeting or anything. An informal annual meeting will do just fine. Just pass out a packet of significant happenings within your business, the goals you’ve reached, and what you will continue to strive for. You can even make this meeting a lunch or coffee date if you’d like, to keep things really informal and stress-free so long as the information is handed out and discussed ahead of time.

 

 

Not only do you need to file for a C Corporation and then file for S Corporation status, but you also need to obtain the proper business licenses and permits your start-up requires, and you need to do so on time. Regulations can vary depending on which state, industry, and locality you’re in, so be sure to check in with the state as to what your particular regulations include.

 

 

Last, but definitely not least, place an emphasis on protecting your intellectual property! Get the necessary trademarks and copyrights to make sure that no one will use the name of your business or your logo whether it’s by accident or on purpose in the case of copyright infringement. The latter of which can really damage your company’s reputation too so protect your business and file for a trademark!