S-Corp Election – Bent Enterprise

The Process of Filing an S-Corporation Election

Any corporation which wishes to file an s-corporation election has to fill a form with the heading “election by a small business corporation”. This form has to be signed by each and every member that holds a pertinent position in the business i.e. the shareholders, before it is approved by the proper authorities. The form is filed with the IRS service center in the same place where the company files its federal corporate tax income return.

Most states do not require the filing of the S-Corporation election after the federal election has taken place, with the exception of New York, Arkansas and New Jersey.

Who Can File For An S-Corporation Election?

There are a few regulations set in place for companies that want to reach this level, these are:

  • Companies that have only one class of stock
  • Companies that have not more than 100 shareholders
  • Domestic companies that have been approved with regards to the laws of any state
  • Companies whose shareholders are not corporations; estates or individuals should fill the gap in the shareholders group.
  • Companies whose shareholders are citizens or legal residents of the United States.

The period for filing for S-Corporation Election

The election can only be valid at the start of the companies’ tax year, if the election is filed within the first fifteen days in third month of the companies’ tax year. This is to say that if the tax year begins in April, the election should be filed within the first 15 days of June.

Can An S-Corporation StatusBe Discontinued?

The answer is yes, and it can be done in two ways:

One of the ways with which an S-Corporation Election status can be discontinued is when the shareholders of a company with more than 50 percent of the shares unanimously agree for discontinuation on the voting day.

If a company that has acquired its S-Corporation Election status goes against the regulations for qualification, then that company is involuntarily terminated. This canoccur in cases whereby the shareholders are neither citizens nor legal residents of the United States.

When this event occurs, the company is automatically discontinued; with the exception of companies who have profits going over 25 percent of the organizations gross receipts in three years. These companies can only be terminated at the start of the next tax year.

When Can The S-Corporation ElectionStatus Are Reinstated?

This can only happen five years after the company has sought for the discontinuation of the S-Corporation Election.

Get Our Service To Help Make Things Easy

We are very professional in the service we proffer, and ensure that no table is left unturned in preparing your S-Corporation Election application. Our services offer to send the filing of this application to the proper authorities; IRS and state

Get our form to begin the process.

For questions get in touch with our customer service representative on either our chat lines or phones.