Georgia Subchapter S: Advantages

• Your Subchapter S corporation is a legal entity separate from the individuals owning the corporation.
• Fractional shares of ownership are easily accounted for and accomodated during the initial stock offering.
• The corporations ability to transact business is not affected by changes in ownership due to the ease of purchase, sale, and giving (gifting) stock.
• Limited personal liability in the case of legal action against the corporation.
• Continuity – the corporation exists until dissolved regardless of the death of one or more of the stockholders.
• Continuity of management
• Interests in the company are easily transferable.
• It’s possible to separate the ownership and the management of the Subchapter S corporation
• A reduced risk of unrecognized equity liquidations because the corporations finances and records must be maintained separately from the individuals running and owning the corporation.
• Losses (net) incurred by the corporation are deductible by shareholders at the individual tax level.
• Stockholders annual meetings along with legal counsel can improve the communication of the corporate members and provide better direction for management.
• Access to much needed credit and resources may be improved, depending on the corporations stellar business record.
• Earnings on “return on investment” like interest, rental payments and other earnings are not subject to self-employment taxes as long as stockholder employees receive an adequate compensation for work performed

Subchapter S election is a popular form of election among new business owners in Georgia and nationwide. Just forming a corporate entity (incorporating your business) in itself gives you a number of benefits tax-wise that you wouldn’t enjoy otherwise.

Starting a business in Georgia is a smart idea.

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