New Jersey offers a thriving economic landscape for small business owners. When you want to join that community, you might be wondering what structure you should choose. One option that many business owners consider is an S Corporation, and for good reason.
There are several reasons why you should consider S Corp registration for your business.
1. Tax advantages
Choosing an S Corp makes it easier to minimize your tax liabilities. S Corp businesses are pass-through entities. That means the company’s profits and losses flow through to the shareholders’ personal tax returns, which can save you significantly by eliminating the corporate tax.
2. Personal asset protection
Establishing an S Corp will provide you with a separate legal entity to protect your personal assets. In an S Corp structure, shareholders carry no personal responsibility for the company’s debts and liabilities. This separation allows you to shield your personal wealth from business-related risk factors, protecting you from unpredictable business hazards.
3. Enhanced credibility
When you decide to pursue outside investments, an S Corp structure lends credibility to your request. As an S Corp, you have greater flexibility in distributing profits and can even offer stock options to employees. This makes S Corp entities a more valuable investment.
Small businesses are a significant part of New Jersey’s economy with 48.8% of the state’s workers employed by small businesses. As you build your business plan and get ready to file your paperwork, consider the advantages of S Corp registration. You can enjoy greater peace of mind as you focus on building your business by protecting yourself and reducing your tax obligations with an S Corp.