The No-Fluff Roadmap to Building a Real Business

If you're reading this, you're not just thinking about starting a business, and you’re serious about building something that lasts.

A real company. With structure. With protection. With potential to scale.

But maybe you're stuck.

• LLC, C-Corp, S-Corp. What’s the difference, and why does it even matter?

• What’s the best setup if you want to grow, not just hustle?

• Is starting a corporation overkill or the smartest move you’ll ever make?

If you’ve got questions, good. Because that means you're thinking like a founder.

Let’s get you answers. The real ones. Not vague, recycled “guru” fluff.

This is the no-BS guide to starting a corporation, from choosing the right business structure to actually filing with the IRS, and doing it in a way that sets you up for long-term success.

What Is an S-Corporation Really?

Most people get this wrong.

An S-corporation is not a business type. It’s a tax election.

Let’s break it down.

• When you form a business, you choose a legal structure: LLC, C-corp, sole proprietorship, etc.

• Once you’ve formed your legal entity, you can ask the IRS to treat your business as an S-corporation for tax purposes.

Why would you want to do that?

Because of something called pass-through taxation. Instead of your business paying corporate income tax (and then you paying taxes again when you take profits), the S-corp lets profits flow directly to your personal tax return, avoiding double taxation.

Quick Example: Your business makes $120,000. Instead of the corporation being taxed and then you being taxed again, you only pay once, on your personal return. And you may save thousands on self-employment taxes.

That’s the real power of the S-corp.

S-Corp vs C-Corp vs LLC: What’s Best for You?

Let’s demystify the alphabet soup. Each structure has its pros and cons, but here’s how to think about them strategically.

1. C-Corporation

The default corporate structure. Great for:

• Raising venture capital

• Going public

• Having multiple classes of stock

Downside? Double taxation. The company gets taxed on profits. Then, when you take dividends, you get taxed again. Ouch.

2. LLC (Limited Liability Company)

The flexible, founder-friendly favorite. Perfect for:

• Solo entrepreneurs or small teams

• Simple ownership and management

• Lower compliance requirements

By default, profits flow through to your personal return. But here’s the kicker, you pay self-employment tax on everything.

Solution? Elect S-corp status. More on that in a second.

3. S-Corporation

Not a structure. A tax strategy. Whether you're an LLC or a C-Corp, you can apply to be taxed as an S-corp.

Best for:

• Founders earning $50,000+ in profit

• Saving on self-employment taxes

• Businesses that don’t need outside investors

Is S-Corp Status Right For You?

Ask yourself this:

• Are you making at least $50,000 in annual profit?

• Are you the sole owner or one of a few?

• Do you want to reduce self-employment taxes?

If you answered yes, the S-corp is likely your best friend. But let’s not sugarcoat it. There are tradeoffs:

Advantages:

• Avoid Double Taxation: Unlike a C-corp, you only get taxed once.

• Save on Self-Employment Tax: Only your salary is subject to payroll tax. Distributions (profits) are not.

• Professional Image: An S-corp setup screams “legit,” which can help with vendors, banks, and clients.

Disadvantages:

• Strict Rules: Must have ≤100 shareholders. All must be U.S. citizens or residents.

• More Compliance: You must pay yourself a “reasonable salary” and file extra IRS forms.

• Ownership Limits: No LLCs, corporations, or foreign entities can be shareholders.

This isn’t a decision to take lightly. But if you're making money and plan to keep growing, S-corp status can unlock real financial advantages.

How To Elect S-Corp Status (The Step-by-Step Blueprint)

Whether you're an LLC or a corporation, the process is nearly identical. Here’s how to do it right:

Step 1: Form Your Business

You can’t elect S-corp status if you don’t exist yet. So first, form an LLC or corporation in your state. That means:

• Filing Articles of Organization or Incorporation

• Choosing a Registered Agent

• Paying your state filing fee

Step 2: Get Your EIN (Employer Identification Number)

This is your business’s Social Security Number, and you’ll need it for banking, payroll, and taxes. Get it for free on the ​IRS website​.

Step 3: Ensure Eligibility

To elect S-corp status, you must meet IRS criteria:

• Must be a U.S.-based business

• 100 or fewer shareholders

• Shareholders must be individuals (not other businesses)

• Only one class of stock

Step 4: File IRS Form 2553

This is where the magic happens. You must file Form 2553 within 75 days of starting your business or beginning your new tax year.

Pro tip: If you miss the deadline, you can file late—but you’ll need to jump through extra hoops.

Step 5: Stay Compliant

Once you're approved:

• Pay yourself a reasonable salary

• File payroll taxes

• Keep personal and business finances 100% separate

• File your annual 1120-S return with the IRS

S-corps save you money, but they come with responsibilities. Stay sharp.

How To Elect S-Corp as an LLC

If you're already running an LLC, this might be the smartest tax move you ever make.

Here's how it works:

1. Your LLC stays exactly the same legally.

2. You just tell the IRS: “Hey, treat me as an S-corp now.”

3. You pay yourself a salary, then take distributions on profits.

Why it matters: Only your salary is hit with Social Security and Medicare taxes. Distributions aren’t.

That’s how savvy founders keep more of what they earn.

How To Elect S-Corp as a Corporation

Started as a C-corp? You can still convert.

Just file IRS Form 2553 to elect S-corp status. But heads up—C-corp to S-corp conversions are trickier. If your corporation has:

• Accumulated earnings

• Depreciated assets

• Complex shareholder structures

…you’ll want a good tax advisor in your corner.

Key Terms You Need To Know Before You File

The corporate world has its own language. Learn it or risk getting blindsided.

• Legal Entity: A business that exists independently of its owners.

• Articles of Incorporation: The legal document that officially creates your corporation.

• Registered Agent: The person or company designated to receive legal notices on your behalf.

• DBA (Doing Business As): A separate name your business operates under, other than its legal name.

• EIN (Employer Identification Number): Like an SSN, but for your business.

• Operating Agreement / Bylaws: Internal rules for how your business is managed.

• S-Corp Election (Form 2553): The IRS form that grants your business S-corp tax treatment.

Ready To Build The Right Way?

You’ve read the playbook. Now it's time to make your move.

At House of Founders, we don’t just teach the theory. We help real founders make smart, fast, confident decisions that grow real businesses.

Want help setting up your S-corp correctly, without wasting time or money? Join the ​House of Founders Program​ and get hands-on support, step-by-step guidance, and done-for-you templates designed to turn you from aspiring entrepreneur into serious founder.

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