What you may not yet realize, however, is that setting up an S corporation in Missouri is easier and faster than many people realize. The reasons for this? Both the Missouri Secretary of State's office and the Internal Revenue Service (through their websites) provide both free forms and pretty understandable instructions for preparing the S corporation paperwork. In fact, using the state's and the IRS's websites, you can get a Missouri S corporation setup with just three, simple steps:
Step #1: Incorporate Either an LLC or Corporation in Missouri
Lots of people don't realize that an S corporation isn't really a corporation at all, but rather a set of accounting procedures. The other bit of news to people is that several types of entities can, with the permission of the Internal Revenue Service, choose to use the S corporation accounting procedures.
In the state of Missouri, you have two easy-to-form entities that can choose the S corporation accounting procedures: an LLC and a corporation. Therefore, your first task if you want to create a Missouri S corporation is filing either the articles of organization for a Missouri limited liability company or the articles of incorporation for a Missouri corporation.
You file these articles with the Missouri Secretary of State. And that sounds maybe a little complicated. But fortunately the Secretary of State's website provides free, easy-to-use, fill-in-the-blank pdf forms.
The precise Internet addresses for the free downloadable incorporation forms change, but if you want to create a Missouri corporation, Google or Bing on "Articles of Incorporation of a For Profit Corporation (Corp. 41)". And if you want to create a Missouri limited liability company, Google or Bing on "Articles of Organization for a Limited Liability Company (LLC 1)".
Using the full name of the Missouri forms (including the state's "official" form numbers) will allow you to quickly locate the free downloads available from the mo dot gov website.
Note: Both the Missouri articles of incorporation pdf and articles of organization pdf include helpful instructions for setting up the entity.
Step #2: Get an EIN (aka "Employer Identification Number")
After the Missouri Secretary of State processes your articles of incorporation or organization, you need to apply for and obtain an employer identification number, sometimes also called a federal employer identification number, for the new corporation or LLC. You get this number from the Internal Revenue Service.
Note: You'll regularly see the acronym EIN and FEIN used to refer to the tax identification number used by a business, too.
You apply and get an employer identification number either using the SS-4 paper form or using the online application available at the IRS's website, irs dot gov.
To use the SS-4 form, download the SS-4 pdf from IRS website and then fill in the form's blanks. The form comes with instructions if you have questions. After you complete the form, either fax or snail-mail it to the Internal Revenue Service. A few weeks after you send in the form, you'll receive a letter from the IRS that gives you your new EIN.
To use the online application, visit the IRS website's home page and click the hyperlink labeled "Apply for an Employer Identification Number (EIN) Online." Step through the online EIN application process by following the on-screen instructions. You will receive your EIN at the end of the online application process. Be sure to print the page that gives you EIN.
Step #3: Elect Subchapter S Status
After you set up the Missouri entity and get your entity's tax ID number, you take the third and final step for setting up an S corporation: Telling the Internal Revenue Service that you want to use the S corporation accounting rules for your Missouri entity.
To tell the IRS you want to use the S corp rules, you file another form, a three-page 2553, with the IRS. The 2553 form, which you should retrieve from the irs dot gov website, should be carefully prepared. Be sure you follow the form instructions precisely. And note that the form needs to be submitted to the IRS within 75 days of the effective S election date. For example, to make an election effective for a new entity created on January 1, you need to file the 2553 by March 15 of the same year. After you complete the 2553 form, you snail-mail or fax the form to the IRS service center that will ultimately process your Missouri S corporation's tax return.
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Tax CPA Steve Nelson is the author of two ebooks for Missouri small business entrepreneurs curious about the Missouri S corporation option. For more info, visit http://www.scorporationsexplained.com/doityourself_MissouriSCorp.htm or http://www.fasteasyincorporationkits.com/MissouriCorporationKit.htm.
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