Understanding Declaring S-Corporation Designations
Declaring S-Corporation designations are used to help maintain the status of an independent small business in a particular state. It helps maintain the tax benefits that one may have gained in the state from the corporation’s status. When you are choosing your business name as a S-Corporation, there are several things that you should keep in mind. First, you want to choose a name that is easy to spell and easy for your customers to remember.
For example, instead of naming your business something like “The Green Box”, choose something more unique and perhaps reflective of what type of products and services your business offers. Another thing to keep in mind with S-Corporation designations is the need to use the letters “S” and “C” in order to show that you are a separate entity from your parent company. If you have chosen to do this, it will be very important that you keep that in mind when you are submitting your articles and financial records to the Secretary of State of your state. You will also want to make sure that you are separating your business from your personal assets, which can be done with a letter of reorganization. Once you have separated your assets from your business, you can easily make the switch from C-corporation to an S-Corporation.
As a last resort, to protect your investment, you should consider having an S incorporation filed by a professional corporate lawyer. Not only will this help protect your interests, but it will also help the court to see that there was some sort of mismanagement of the corporation and will allow you to amend your Articles of Organization if necessary. Always remember that you have very specific responsibilities when you open a corporation, and you need an attorney to help you with these responsibilities.