Starting an S Corp
How much does it cost to start an S Corp? The filing fee will vary by state, may be a set fee, and may be calculated based on the authorized number of shares. The SOS will typically charge between $100 and $250 for filing and administrative fees.
Choosing a Business Entity
Choosing the right structure for your business in Hawaii doesn’t have to be complicated. By forming an S corporation, you can save money in taxes among other operational benefits. Ensure your business complies with state laws and guidelines with a step-by-step guide to forming an S corp.
Incorporation Process in Hawaii
Once you’ve decided to start an S corporation in Hawaii, the next step is to file your Articles of Incorporation with the State of Hawaii’s Department of Commerce and Consumer Affairs (DCCA). This document serves as a legal agreement between the corporation and the state.
Law firms typically offer flat fees between $500 and $700 for this service, yet some may charge more than $5,000 depending on the complexity.
Basic Requirements and Steps
- Does an S Corp align with your business’s growth?
- Verify S corp eligibility.
- Form an S Corp in Hawaii in 7 steps.
- Elect S corp tax status by filing Form 2553 (Election by a Small Business Corporation) with the IRS.
- Establish your corporation as an S corporation after thorough research, considering the drawbacks and costs such as excise taxes, extra tax prep costs, and miscellaneous fees.
Registration and Taxation
- To start your S-corp, fill out the articles of incorporation form.
- Ensure compliance with the corporate tax rate for an S Corporation in Hawaii, which is 6.4%.
- The difference in taxation between a C corp and an S corp.
- File an annual report for your S Corp in Hawaii every year.
- Build credit in the name of your S corp and meet other legal requirements such as permits and an EIN.
Business Naming and Brand Identity
After deciding to start an S-Corp in Hawaii, choosing a business name that enables you to develop a strong brand identity is significant. Avoid profanities and follow legal procedures in naming your partnership.
Considerations Before Electing S Corp Status
- Is an S corp the best strategy for your business?
- Why an LLC might be the best structure for the S corp tax status.
- Assess if the tax benefits of an S corp are suitable for your business.
- Setting up payroll, opening a business bank account, and obtaining local permits.
Additional Information
- Shareholder limitations of an S Corporation.
- Importance of drafting bylaws for internal governance.
- Choosing a state of incorporation that benefits your business.
Remember, for specific steps and detailed processes, refer to local legal guidelines, IRS instructions, or seek professional consultancy.