Does an S Corp have to distribute earnings?
Table of Contents
Does an S Corp have to distribute earnings?
Just like regular corporations, S corps can distribute profits to their shareholders, keep them as retained earnings or do a little of both. The difference is that the regular corporation makes this decision after it pays corporate income taxes. An S corp doesn’t pay taxes.
Can a small business be an S Corp?
An S corporation is any business that files taxes under Subchapter S of Chapter 1 of the Internal Revenue Code. S corporations can be particularly beneficial to small businesses due primarily to the tax benefits and legal protection afforded to its shareholders.
What happens to an S Corp in a divorce?
Whether the corporation is a C or S Corp, both the individual and corporate tax returns will be vital in a divorce proceeding. So, even if a spouse does not have an interest in the corporation, it will still impact divorce proceedings.
Is a corporation protected from divorce?
A corporation is also a separate legal entity from you as an individual. The corporation, like the LLC, could hold the business assets and protect them in the event of divorce, ideally being created prior to marriage. A corporation is registered with the state and has a separate tax ID number.
