ContractsCounsel Logo

Legal Questions and Answers

Get free proposals from vetted lawyers in our marketplace.

No upfront payment required. Pay only if you hire.
Home Q&A Forum What is an S corp?


S Corp


Asked on Jun 3, 2023

What is an S corp?

I am considering starting a business and I have heard about the different types of business entities. One of them is an S corp and I am interested in learning more about it. I am looking for information on what an S corp is, what its advantages and disadvantages are, and whether it is the right type of business entity for my situation. I am hoping to get more information from a lawyer to help me make an informed decision.

1 Attorney answer




Answered 393 days ago

Paul S.

ContractsCounsel verified

Business Lawyer
Licensed in California, Ohio
Free Consultation

An S-corp isn't actually a type of business. Rather, it's a tax election that you make with the IRS, after forming either a C-corporation or an LLC. When you form a C-corporation and then make an S-corp tax election, you will be taxed like a partnership (if there are more than one shareholder) or sole proprietorship (if only you). If you form an LLC (which is already taxed like a partnership or sole proprietorship) and make an S-corp election, you can lower your self-employment taxes. Keep in mind, also, that there are restrictions on the number and kind of shareholders in an S-corp.

Use of the ContractsCounsel Q&A Forum does not create an attorney-client relationship between User and any Lawyer User. The Forum is not a substitute for legal advice from a lawyer but is intended to be educational and to help the user determine if legal services are necessary. The Forum, Content, and communications on the Forum do not constitute legal advice.
Meet some lawyers on our platform

Ryenne S.

671 projects on CC
CC verified
View Profile

Michael K.

101 projects on CC
CC verified
View Profile

Sarah S.

35 projects on CC
CC verified
View Profile

Damien B.

19 projects on CC
CC verified
View Profile

Find lawyers and attorneys by city