S Corp Registration
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S-Corp Registration from India
S Corp Registration Guide: Steps, Cost & Requirements
What is S Corp Registration?
The process of choosing a company entity to be taxed as a S Corporation in the US under Sub-chapter S of the Internal Revenue Code is known as S Corp registration. An S corporation avoids double taxation by allowing revenues and losses to flow straight to the owners’ personal tax returns, unlike a C corporation.
If eligible, creating an LLC or corporation and then choosing S Corp status might provide some tax advantages for Indian citizens or businesses wishing to grow in the United States. It’s crucial to remember that a S Corp can only have stockholders who are U.S. citizens or residents.
This implies that unless they are U.S. residents, Indian business owners are not permitted to directly own shares in a S Corp. However, for small enterprises looking to streamline tax reporting and lower corporate tax burden, a S Corp might be a wise choice for qualified Indian individuals who satisfy U.S. residency criteria (for example, through green cards or substantial presence).
Important Compliance after S Corporation
To keep your company operating legally and actively after it is registered as a S Corporation in the USA, you must adhere to multiple continuing compliance obligations. The main compliances are as follows:
- Annual Tax Filings: Report income, deductions, and the shareholders’ portion of the income each year by filing IRS Form 1120S (U.S. Income Tax Return for a S Corporation).
- Problem K-1 Statements: Every year, give each shareholder a copy of Schedule K-1, which lists their portion of the company’s profits, losses, and dividends.
- Payroll Tax Compliance: You must abide by all federal and state payroll tax regulations, including withholding and reporting, if your S Corp employs people or pays its owners a salary.
- State-Level Filings and Taxes: In order to maintain the company’s good standing, you could be required to file state income tax returns, franchise taxes, or annual reports, depending on the state in which you incorporated.
- Keep Correct Records: As mandated by state law, maintain current corporate records, such as meeting minutes, bylaws, and shareholder agreements.
- Timely Renewal of Licenses and Permits: Depending on your company’s location and type, renew any business licenses, permits, or registrations as necessary.
- IRS S Corporation Election Maintenance: If your S Corp violates IRS eligibility requirements (such as issuing numerous stock classes or having a non-U.S. shareholder), its status could be canceled.
Maintaining compliance guarantees the preservation of the S Corp’s continuing tax benefits, protects its legal standing, and helps it avoid penalties.
Why Ebizfiling?
EbizFiling provides comprehensive end-to-end support and professional help in registering an S Corporation in the USA from India. Document preparation, filing, EIN application, and compliance monitoring are all handled by our team of experts.
Having assisted more than 5000 firms and international founders, we guarantee precise, prompt, and reasonably priced S Corp registration. EbizFiling provides you with competent and clear guidance at every stage, whether it’s selecting the appropriate state, selecting a registered agent, or comprehending post-incorporation requirements.
S Corporation Fees
Choose Your Package
ESSENTIAL
₹ 39999/-
(All Inclusive)
- LLC Formation
- Article of Organization
- Operating Agreement
ENHANCED
₹ 69999/-
(All Inclusive)
- LLC Formation
- Registered Agent for One Year
- Registered Office Address for one year
- Article of Organization
- Operating Agreement
- EIN
ULTIMATE
₹ 71999/-
(All Inclusive)
- LLC Formation
- Registered Agent for One Year
- Registered Office Address for one year
- Article of Organization
- Operating Agreement
- EIN
- Bank Account Assistance (Wise and Mercury)
Benefits of Registering a S Corporation from India
Clear Profit Distribution
Profits and losses are distributed strictly as per shareholding, making accounting and ownership clear.
Credibility with Investors
S Corps enjoy higher credibility in the U.S. market, helping Indian businesses attract local investors and partners.
Conversion from LLC
Indian-owned LLCs can elect S Corp status to gain tax benefits without changing their business structure entirely.
Pass-through Taxation
S Corps avoid double taxation by passing income directly to shareholders, who report it on their personal tax returns.
Eligibility for U.S. Contracts
Forming an S Corp allows Indian founders to legally bid for and execute U.S. federal and state contracts.
Limited Liability
Shareholders are not personally responsible for business debts or liabilities, just like in other corporations.
Easy Ownership Transfer
S Corps allow easier transfer of shares to U.S. citizens or residents, useful if bringing in American partners.
No Self-Employment Tax
Only salaries are taxed for Social Security and Medicare; dividend distributions are not, reducing overall tax burden.
What Documents are required for S Corp Registration?
S Corporation Documents
- Company Name and Desired Business Structure
- Articles of Incorporation (also called Certificate of Incorporation)
- Registered Agent Consent and Details
- Director and Shareholder Information (Name, Address, ID Proof)
- Company Bylaws (internal governance rules)
- Employer Identification Number (EIN) Application (Form SS-4)
- Passport copy of Non-U.S. Founder(s)
- Proof of U.S. Business Address (can be a virtual office or address service)
- Banking Resolution (for opening a U.S. business bank account)
- Digital Signature or Consent Forms (depending on the state of incorporation)
Note: The exact documents may vary depending on the U.S. state and the service provider’s requirements.
How to Register a S Corporation in the USA: 5 Easy steps
1
Choose State and Business Name
2
File Articles of Incorporation
3
Appoint a Registered Agent
4
Apply for EIN from IRS
5
Draft Bylaws & Hold Board Meeting.
Choose State & Name
Our experts will help you select the right U.S. state based on tax and legal preferences. We’ll also assist in finalizing a unique and compliant business name.
File Incorporation Documents
We will draft and file the Articles of Incorporation with the respective Secretary of State to legally form your C Corporation.
Appoint Registered Agent
We’ll help appoint a reliable Registered Agent in your chosen state to receive legal notices and compliance documents on your behalf.
Frequently Asked Questions on S Corp Registration.
Get answers to all your queries
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Can a non-U.S. resident from India register an S Corporation?
No, S Corporations are only allowed to have shareholders who are U.S. citizens or permanent residents.
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How is an S Corp different from a C Corp?
The main difference is taxation. An S Corp avoids double taxation by passing profits to shareholders’ personal tax returns, while a C Corp is taxed at both corporate and individual levels.
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Can I convert my existing LLC into an S Corporation?
Yes, if your LLC meets the eligibility criteria, you can elect S Corporation status by filing IRS Form 2553.
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What are the main tax benefits of an S Corporation?
S Corps enjoy pass-through taxation and avoid paying federal corporate income tax. This may reduce the total tax burden for shareholders.
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Is it mandatory to pay myself a salary as an S Corp owner?
Yes, if you work for the company, the IRS requires you to take a “reasonable salary” before taking profit distributions.
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Can Indian founders register an S Corp with a U.S. partner?
Yes, but only the U.S. citizen or permanent resident can hold shares. The Indian partner cannot be a shareholder.
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What are the filing requirements for an S Corp ?
S Corps must file IRS Form 1120-S annually, issue Schedule K-1 to shareholders, and meet state-level filing requirements depending on where the company is registered.
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Can an S Corp have more than one owner?
Yes, but it cannot have more than 100 shareholders, and all must be U.S. individuals or qualifying trusts or estates.
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Is there a limit to the type of shareholders in an S Corp?
Yes, S Corps cannot have corporations, partnerships, or non-resident aliens as shareholders.
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What business activities can an S Corp conduct?
S Corps can engage in any lawful business activity in the U.S., including services, tech, manufacturing, consulting, and more.
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Can I operate an S Corp from India?
You can operate remotely, but as a non-resident, you cannot own shares. You must involve a U.S.-based person to act as shareholder.
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How do I start an S Corporation in the USA from India?
First, form an eligible business entity like a corporation or LLC, then file IRS Form 2553 with U.S. citizen shareholders to elect S Corp status.
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Are S Corps subject to U.S. payroll taxes?
Yes, S Corps must withhold and pay payroll taxes on salaries paid to employee-shareholders and other staff.
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Can I receive dividends from an S Corp if I’m not a shareholder?
No, only shareholders can receive distributions, and all shareholders must be U.S. persons as defined by the IRS.
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What documents are needed to register an S Corp?
You need Articles of Incorporation, Employer Identification Number (EIN), IRS Form 2553, and a registered agent address in the U.S.
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How long does it take to register an S Corp?
Typically, it takes 1 to 2 weeks to register the business and obtain S Corp status, depending on the state and IRS processing time.
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What is Form 2553 and when should it be filed?
Form 2553 is the IRS form used to elect S Corporation status. It must be filed within 75 days of forming the entity or starting a new tax year.
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Can an S Corp be owned by another company?
No, all shareholders must be individuals, not entities, unless they are qualifying estates or trusts.
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What happens if my S Corp loses eligibility?
If an S Corp violates ownership or income rules, the IRS can revoke its S Corp status and treat it as a C Corporation for tax purposes.
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How can EbizFiling help with S Corp registration from India?
EbizFiling can guide you through U.S. entity setup, help with document preparation, coordinate with U.S.-based partners or directors, and file all necessary IRS forms to register an S Corporation compliantly.
