WHAT IS A PENNSYLVANIA SUB CHAPTER S CORPORATION?

If you are a Citizen or Permanent Resident of the United States, it is the most tax advantageous type of Corporation you can have! At the state level, it’s filed as a “plain vanilla” corporation, but if it meets certain requirements and elects to be treated as a “small business corporation,” at the federal level it can enjoy distinct tax benefits.

The Pennsylvania Subchapter S Corporation is an attractive form of doing business because it combines the business and legal characteristics of a corporation with many of the income tax characteristics of a partnership. For flow-through of profits and losses to the owners, the Subchapter S Corporation is treated in a manner similar to a partnership. For other purposes, such as limited liability, distributions, redemptions and reorganizations, the Subchapter S Corporation is treated much like a regular corporation.

What are the tax benefits of a Pennsylvania Subchapter S Corporation? A regular Corporation is subject to federal and state Corporate Income Taxes. Therefore, profits are taxed first on the corporate level and then again at the individual level of the shareholders to whom the profits are distributed.

This double taxation could result in a combined taxation rate of 70% or higher! A Sub-Chapter S Corporation is exempt from federal and state corporate Income Tax, so that the earnings of the Corporation flow directly to the owners. View our Pennsylvania Sub Chapter S Corporation list of services, speed of service options, and shipping options below.

How to Build Your Business

Women Owned Business (WBE) Certification

Women Owned Businesses (WBE) Certification
A women-owned business is a for-profit enterprise, regardless of size, physically located in the United States or its trust territories, which is owned, operated and controlled by women members. The women who qualify the business must be U.S. citizens. Ownership by women means the business is at least 51% owned by women. Further, the management and daily operations are controlled by those women members. The fee for Women Owned Business Certification if ordered at the time of formation of the company is $750.

You select the Certifying Organization. Choose from any of the individual states in the US, any county in the US, Women's Business Enterprise National Council, National Minority Supplier Development Council, Disadvantaged Business Enterprise Certification, Small Business Administrations 8a Certification or Federal Small Disadvantaged Business designation. The fee for Women Owned Business Certification if ordered at the time of formation of the company is $750.

Minority Owned Businesses (MBE) Certification

Minority Owned Businesses (MBE) Certification
A minority-owned business is a for-profit enterprise, regardless of size, physically located in the United States or its trust territories, which is owned, operated and controlled by minority group members. "Minority group members" are United States citizens who are Asian, Black, Hispanic and Native American. Ownership by minority means the business is at least 51% owned by such individuals. Further, the management and daily operations are controlled by those minority group members. The fee for Minority Owned Business Certification if ordered at the time of formation of the company is $750.

You select the Certifying Organization. Choose from any of the individual states in the US, any county in the US, National Minority Supplier Development Council, Disadvantaged Business Enterprise Certification, Small Business Administrations 8a Certification or Federal Small Disadvantaged Business designation. The fee for Minority Owned Business Certification if ordered at the time of formation of the company is $750.

Additional Spiegel & Utrera, P.A. General Counsel Club Cards

Enable your other officers, members, beneficiaries, trustees and employees to access the Spiegel & Utrera, P.A. General Counsel Club to answer their legal questions and address any legal concerns they have. Select this service to receive one additional Spiegel & Utrera, P.A. General Counsel Club Card at a cost of just $59.95. If you would like to order more than one additional card, you may do so when confirming your order with an associate of Spiegel & Utrera, P.A.

Service Agreement

If your Corporation is a service business, you’ll need a Service Agreement.
The bedrock foundation of many service businesses is a customized written agreement entered into with its customers. Many franchises sold for tens of thousands of dollars are business formats revolving around a Service Agreement. The key with a Service Agreement is to make it work as a marketing tool offering the business services in the widest variety of formats to your customers. For example, a one-time use customer needs to be converted to a monthly, quarterly or annual type repeat customer. At Spiegel & Utrera we want to help you get, and keep, your customers while looking professional and at the same time maximizing each sale with a friendly service agreement. A Service Agreement starts at $367.95 up to $897.95 depending upon its complexity if ordered at the time of forming your corporation. We will prepare a draft of your Service Agreement and deliver the draft by fax or email to you for your review. Once you have had an opportunity to review the Service Agreement we will meet over the telephone to discuss the various aspects of the draft Service Agreement. Thereafter, Spiegel & Utrera will make changes to the Service Agreement to finalize it. Once the Service agreement has been finalized and delivered to you, you should take it to your printer to be printed and padded so it will always look professional and non-negotiable.

Start-Up Essentials

How to Save Money on Taxes

IRS Section 1244 Corporate Stock

This is another powerful federal tax provision which can be used by almost all corporations. This special provision of the Internal Revenue Code allows you to deduct as an ordinary loss, rather than as a capital loss, a loss on the sale, trade or worthlessness of the stock in your corporation. The amount you can deduct as ordinary loss is up to $50,000 per year or $100,000 per year, if filing a joint return with your spouse. Generally, without 1244 stock, your loss would be limited to $3,000 per year or $6,000 per year, if filing a joint return with your spouse. A corporation that issues 1244 stock and elects to be an S corporation gives its shareholders the best of both possible worlds from a tax standpoint. The issuance of 1244 stock costs only an additional $50 when ordered with the formation of your corporation and comes with all the necessary documents, including LLC resolutions, 1244 plan and special stock certificates.

Home Office Lease

Agreement detailing the leasing of office space by a homeowner or tenant with a Corporation for use as the Corporation's principal place of business. The typical tax savings under this agreement can exceed $1,200 - per year. The Home Office Lease is only $150 when ordered with your Corporation, and as an added bonus to our clients, we draft the Lease in such a manner that it is automatically renewable. We do not recommend a home office lease for a single owner corporation or single owner limited liability company or a where husband and wife file a joint tax return and are the only owners of the corporation or limited liability company.

Motor Vehicle Lease

If you use your vehicle for business purposes, it is usually much more advantageous to keep the vehicle in your name and lease the vehicle to the Corporation The typical tax savings under this type of arrangement ranges between $1,500 and $3,000 per tax year. We can prepare the lease for only $150 when ordered with your Corporation. We do not recommend a motor vehicle lease for a single owner corporation or single owner limited liability company or where a where husband and wife file a joint tax return and are the only owners of the corporation or limited liability company.

Office Equipment Lease

A lease which details the leasing of office equipment by a business. Once again, by leasing equipment to the Corporation, you create a legitimate business expense for the Corporation and a Tax Deduction. Typically, the tax savings under this type of arrangement can exceed $1,000 per tax year. The cost for an Office Equipment Lease is only $150, when ordered with your Corporation. We do not recommend an office equipment lease for a single owner corporation or single owner limited liability company or a where husband and wife file a joint tax return and are the only owners of the corporation or limited liability company.

Qualified Sub Chapter S Subsidiary

This is a very powerful tax strategy and tax advantage. If your Sub Chapter S Corporation is to be owned 100 percent by another Sub Chapter S Corporation, your Corporation can become a Qualified Sub Chapter S Subsidiary. The charge to create the Qualified Sub Chapter S Subsidiary is an additional $150 provided it is ordered along with the formation of the Corporation.

Effectively Controlling Your Business

Stock Options

An option to buy stock gives the holder the exclusive right for a specified period of time to purchase stock at the price and under the terms and conditions specified in the agreement. Although the option grantor is bound by the option and generally cannot revoke it, the option holder is not bound unless he exercises the option. Options are regarded as capital assets if the underlying property constitutes, or if acquired would constitute, a capital asset in the hands of the holder. The receipt of consideration for the option is not taxable until the option either is exercised or has lapsed. If the option is exercised, the consideration is treated as part of the selling price and included in computing the gain or loss in the sale of the stock. Since stock is generally a capital asset, gain or loss on the sale would be entitled to capital treatment, either long-term or short-term. The holding period for qualification for long-term capital treatment is more than one year. The sellerÆs holding period for the stock sold includes the period during which the option is outstanding. Upon the failure of the option holder to exercise the option, if the consideration is forfeited, the option grantor generally realizes short-term capital gain, but income is not realized until the time of forfeiture. An option holderÆs gain or loss upon a sale of the option, or loss upon a failure to exercise the option, would be entitled to capital gain treatment. The holding period of the option will determine whether long-term or short-term capital gain or loss is realized. For this purpose, if the loss is attributable to a failure to exercise the option, the option is deemed to have been sold on the day it expired. If the option is exercised, the consideration for the option is treated as part of the purchase price and is included in the option holderÆs basis for the stock purchased. The purchaserÆs holding period does not include the period curing which the option is outstanding.

Stock options can be utilized very effectively by an entrepreneur, for example:

Stock is given to an employee, but if he leaves the employ, the corporation has the option to repurchase the employees stock at fixed or variable price.
Stock in the corporation is sold to raise needed capital, but the corporation has the right to repurchase the stock in the future.
For whatever reason a person would like to be a shareholder in the corporation but not now, an option to purchase stock is purchased from the corporation.

The stock option can be an on-target management incentive or control device. Stock options can be used in employment agreements, consultants agreements, incentive agreements, as means of raising equity capital or borrowing funds. Spiegel and Utrera, P.A. will provide the Stock Option service for your business for only $367.95 if ordered at the time of incorporation.

Voting Trust

A voting trust is a device for combining the voting power of shareholders. It is not unlawful for shareholders to combine their voting stock for the election of directors so as to obtain or continue the control or management of a corporation. California Statutes limit the duration of voting trusts to a period of ten years. In order to avoid the invalidation of a voting trust, the applicable statutes should be strictly complied with. There are various situations in which a voting trust agreement may be used. It may be used when several shareholders wish to vote their respective stock as a unit. It also may be used for the special purpose of protecting corporate creditors. The general plan of a voting trust is controlled by the voting trust agreement; then the shareholders endorse their stock certificates to the voting trustee. The voting trustee surrenders these certificates to the corporation and the voting trustee receives in return new certificates issued in the name of the voting trustee, and the voting trustee votes the shares as principal, rather than as agent as in the case of proxies. For tax purposes, the voting trust certificate takes the place of the stock it represents. Tax transactions with respect to voting trust certificates are treated as transaction affecting the stock. A voting trust is not an association taxable as a corporation, because in itself it is not an enterprise for the carrying on of business for profit. Used correctly, the Voting Trust could be a useful tool for your corporation. The charge for Spiegel and Utrera, P.A. to form a Voting Trust for your company is only $767.95 if ordered at the time of incorporation.

Asset Protection / How to Protect Your Business

Start-Up Money for Your Business

Perfecting the Lien Created by the Security Agreement - Uniform Commercial Code

Liens against personal property are perfected differently than liens on real property. The use of the phrase “personal property” does not mean property owned personally by the owner of a business. Instead, the term refers to all property used inside or outside of a business (with the exception of real property) including equipment, furniture, inventory, etc. To perfect a lien against personal property used in a business, strict adherence must be followed pursuant to the Uniform Commercial Code, documentation must be created, executed and filed with the appropriate government agencies. Once recorded, the Uniform Commercial Code makes a lien valid and serves as notice that the lien exists. Usually, the first recorded lien takes priority. Provided you have ordered the Spiegel & Utrera, P.A. Lenders Agreement and Promissory Note and the Spiegel & Utrera, P.A. Security Agreement, the documentation required to perfect the lien under the Uniform Commercial Code is $75, if ordered at the time of incorporation.

Security Agreement for Corporation

Once you have decided to use the Spiegel & Utrera, P.A. Lenders Agreement and Promissory Note, the next step is to collateralize the personal property assets of the company in favor of you, the lender with a Security Agreement. A Security Agreement is a contract between a lender and borrower. The Security Agreement gives the lender a security interest and the right to repossess personal property that a borrower has offered as collateral if a note is not paid per its agreed terms. This right is superior to all subsequent creditors provided the lien given by the Security Agreement is perfected. The Security Agreement available from Spiegel & Utrera, P.A. is complete and includes provisions relating to type of collateral being secured, address where collateral will be kept, executing further documents, events that shall constitute a default, assignment of secured collateral by holder, a listing of events that would constitute default by the borrower and the rights of the lender should the borrower default. Provided you have ordered the Spiegel & Utrera, P.A. Lenders Agreement and Promissory Note, the fee for the Security Agreement, if ordered at the time of incorporation, is an additional $75.

Non-Voting Stock

It is important to know that a Subchapter S corporation is not treated as having more than one class of stock solely because there are differences in voting rights between shares of common stock, so long as the rights to profit distributions and liquidation proceeds are identical (i.e., stockholders have no preferential rights to dividends or to proceeds from assets sold because of liquidation) for both such voting and nonvoting stock. Allowing differences in voting rights is particularly advantageous to entrepreneurs who need to attract additional capital, but who also want to retain voting control over their corporation. For example, as a founding shareholder, you may want to have all of the common voting stock so as to participate in the management of the corporation and control its operations, while transferring all of the common non-voting stock to your children so that they may share in the appreciation value and earnings of the corporation. If so, it’s likely you’ll want to protect yourself with a Shareholders Restrictive Agreement. Seasoned business-owners will instinctually recognize the value of such an agreement. We’ll draft a special provision for your Articles of Incorporation and issue special certificates for common non-voting shares of stock. This item costs only an additional $74.95 if ordered at the time of Incorporation.

Lender’s Agreement & Promissory Note for Corporation

Initially a corporation needs a cash infusion. Additionally, the corporation may require a continuing advance of funds for some time. How does it get the money? After the initial purchase of shares of the corporation for at least their par value, generally, the corporation has two choices on obtaining additional money; (1) shareholders pay for their initial shares in excess of their par value thereby creating excess Paid-in Capital or (2) loan money to the corporation. Lending money to the corporation is the preferred method to advance money to the corporation because the lender is seen as a creditor of the corporation. The lending of money to the corporation is accomplished with a Lender's Agreement and a Promissory Note. Both of these instruments together provide for an initial amount of a loan to the corporation and also provide for future advances of money the lender might make to the corporation. In the event of failure of the business, the loan will be fully tax deductible by the lender as a bad debt. The fee for a Lender’s Agreement and Promissory Note for your Corporation at the time of incorporating is $75.

What You Need if You are Hiring Workers

How to Build Credit for Your Business

D & B Number - Start Building Your Business Credit Immediately

According to Dun & Bradstreet, the D & B number is widely used by both commercial and federal entities and was adopted as the standard business identifier for federal electronic commerce as early as October 1994. The D & B number was also incorporated in the Federal Acquisition Regulation (FAR) in April 1998 as the United States Federal GovernmentÆs contractor identification code for all procurement-related activities. The D & B number is also known as the D-U-N-S« number and remains with the company location to which is has been assigned even if it closes or goes out of business. With that in mind, it is important to have a physical location for your business when obtaining the D & B number. D & B also states that the D-U-N-S« number also ôunlocksö a wealth of valued-added data associated with that entity, including the business name, physical and mailing addresses, trade styles (fictitious name, assumed name, alternate name or DBA), principal names, financial, payment experiences, industry classifications (SICs [Standard Industry Classification] and NAICS [North American Industry Classification System]), socio-economic status, government data and more. The D-U-N-S« number also links members of corporate family trees worldwide. If ordered at the time of forming your company, Spiegel & Utrera, P.A. will obtain your D & B number, also known as your D-U-N-S« number, for $50. If ordered later, the charge to obtain the D & B number, also known as your D-U-N-S« number, is $167.95.

Your Success Starts with Knowledge

Detours & Contradictions

If you want to start or grow your own business, Lawrence J. Spiegel's, 223 page Detours and Contradictions is the nuts and bolts resource you need to become a successful entrepreneur. Use this book, and all your available resources, to begin the challenging yet fulfilling journey of entrepreneurship. A note of caution-this book doesn't feature obscure theories from the world of academia; Spiegel provides 223 pages of sound advice based on decades of attending the school of hard knocks, bootstrapping his way to the top. By ticking the box you will get your Detours and Contradictions for $13.50 which includes shipping, handling and processing, when ordered with the formation of your corporation. PLUS Lawrence J. Spiegel will personally autograph your copy of Detours and Contradictions.

Charlie's Entrepreneurial Journey

Building your business, or selecting the type of business to start, is easy when using Charlie’s Entrepreneurial Journey as a guide and applying Lawrence J. Spiegel’s thirty eight "Principles of Entrepreneurship" to your business. Spiegel’s latest book provides 416 pages of insight into the world of an aspiring entrepreneur named Charlie. Charlie’s journey leads him through topics never discussed in business books but essential to success. Topics include: costs associated with Acquiring a Customer, Urgency to Purchase, Saturation Advertising, Success Leaves Tracks and Repetitive Business. Spiegel’s "Principles of Entrepreneurship" cannot be found anywhere else. In fact, no one has ever exposed the business secrets Spiegel discloses. If you are seeking to spark your business you will find an EXPLOSION in this book. By ticking the box you will get Charlie’s Entrepreneurial Journey for $19.50 which includes shipping, handling and processing, when ordered with the formation of your company. PLUS Lawrence J. Spiegel will personally autograph your copy of Charlie’s Entrepreneurial Journey.

Pennsylvania SubChapter S Corporation

$439.95

PRICE INCLUDES

WHAT IS A PENNSYLVANIA SUB CHAPTER S CORPORATION?

How to Build Your Business

Start-Up Essentials

How to Save Money on Taxes

Effectively Controlling Your Business

Asset Protection / How to Protect Your Business

Start-Up Money for Your Business

What You Need if You are Hiring Workers

How to Build Credit for Your Business

Your Success Starts with Knowledge

Shipping information

Shipment of your Entity Records Book and Seal

Worldwide electronic transfer of documents - delivered to you the same day entity documents are ready.

Shipping to Canada or North America

Shipping to Mexico or South America

Shipping to countries in Europe

Shipping to Asia

Shipping to Africa

Shipping to Australia

Speed of services

WWW.AMERILAWYER.COM/411

Seven Powerful Reasons to Incorporate or Organize an LLC

Overall discussion of the tax advantages of incorporating or organizing a LLC

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