I want to set up an S Corporation. Can you help?
By: Jason Simmons | Published June 16, 2016
Many potential clients looking to set up a new business call the office with this question. While this is certainly a good starting point, it generally tells me that we need to have a much broader conversation about what types of legal business entities Missouri recognizes. The bottom line is that the statement commingles and confuses state law entity types with federal tax matters.
There are four main types of business entities in Missouri, as well as most states, some of which have sub-types with distinct features. When meeting with a potential client to discuss setting up a new business venture, I typically identify the four types of entities as follows:
● Sole Proprietorships
● Partnerships
○ General Partnership
○ Limited Partnership
○ Limited Liability Partnership
○ Limited Liability Limited Partnership
● Corporations
○ General Business Corporation
○ Statutory Close Corporation
○ Professional Corporation
○ Non-Profit Corporation
● Limited Liability Company’s (LLC’s)
If you look at the list above, you will see that “S Corporation” is not an entity type that can be selected. This is because an “S Corporation” is not an entity type at all, but rather, a federal income tax classification under the Internal Revenue Code.
If you have questions about what type of entity your new business venture should be, please give me a call. Cripps & Simmons would be happy to schedule an appointment for you to talk about which entity type is right for you, including whether or not having that new entity make an election to be taxed as an S Corporation is appropriate.