New company (s corp) set up ?

Question

I searched the websites.Got lot of info..After reading all those details, I am confused with the steps..
Anyone please help me to know the "just the steps" for starting a s corporation in new york state without the help of a "third party-(cpa/lawyer)"?.please help me.

Answer 1

Jn J,

If the steps confuse you it is an indication that you need an attorney to help you. I am also surprised you selected an s-corp over an LLC.

Here are the different types of organizations:

A sole proprietorship has the least amount of expense and headaches to setup and operate, but the also the least amount of liability protection. If you go bankrupt as a SP you must declare personal bankruptcy. Income and losses are taxed to you personally and also completely subject to Self Employment tax of 15%.

An LLC is an option you do not mention, but it offers liability protection and is an organization that is more difficult to set up and operate than an SP but less than a Corporation. Income is taxed on your personal tax return as a "pass through". These taxes may be higher if you have income right away, but if you have losses they are deductible against ordinary income on your tax return. SET is due on your salary, but not necessarily on company profits.

An S- corporation has the same tax status as an LLC but is more complicated to setup and operate. If offers liability protections.

A C-Corp is the most complicated to setup and operate, but income is taxed at the corporate rates which can be less than the personal rates. If you sell assets from a C -Corp and then want the money for yourself, it will be taxed twice - once in the corp and once personally. But if you sell the entire business, you get the lowest possible tax rate, capital gains tax, currently 15%.

In short if you will have early losses and need liability protection do an LLC. If you will have a substantial business with lots of profits especially early on, do a regular C Corp. If you're dabbling here and have no real expectation of a meaningful business - do a Sole Proprietorship.

Again I recommend that you seek professional assistance if you are starting what you expect to be a legitimate business.

Good Luck,
Dana B - President
www.thebarfieldgroup.com

Answer 2

I have an S Corp and I decided to pay an attorney to set this up. I think it cost about 300USD. Maybe a bit more.

I am not sure of the steps, but here are the things he did for me:
1. Researched and registered my corp. name with the state.
2. Filled out the corp paperwork listing the corp officers names, addresses, etc.
3. Printed stock certificates (must be done).
4. Bound all the paperwork in a nice binder, including embossed company name and a corporate seal device.
5. Filed all the paperwork.

Good luck. Without an attorney doing this for you, you will need it.

Answer 3

How do you know an S-Corp is the right vehicle for your business? Have you talked that over with an accountant or lawyer? I suspect not. It may seem like the cheap way to do it by doing it yourself but, trust me, it isn't. It will cost you money if you do not get all your ducks in a row. If striking out on your own is worth anythjing it should be worth a few hundred bucks to get good advice that will pay for itself many times over during your business career.

Answer 4

You do not need someone to set this up for you...just go onto irs.gov and get your ein number...which you can apply for online and get one after pressing submit ( and check to see if you need to fill out any other form) ...and also go to your states secretary of state website and they should have forms to download, fill them out...and send to them with your payment to register with the state..voila...