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A domestic BCA is a corporation registered in Illinois under the Business Corporation Act. To become an S corporation, a domestic BCA must change its tax year to end December 31st and meet other requirements. S corporations allow business income and losses to pass through to owners’ personal tax returns, avoiding double taxation.
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Costs and Tax Considerations
- An LLC in Illinois costs $500 to form plus a $250 annual fee. Corporations usually cost $125 to start plus a $100 annual fee. Foreign LLCs pay 35% tax on U.S. earnings. Domestic LLCs follow U.S. tax laws for owners.
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Liability and Tax Implications
- Both domestic BCAs and S corps limit owners’ personal liability. However, S corps pass losses and deductions to owners’ taxes. Corporate bylaws outline operations. Articles of incorporation affect liability.
Is a domestic BCA an S corp or C corp?