S corp status –pros and cons (Article from Small Business Trends) :
My Comment: As this article points out, there are pros and cons to S corp status, as there is with any legal construct. Aside from the various limitations pointed out, there are three additional considerations worth noting: (a) as the business grows and, hopefully becomes profitable, the initial tax benefits from being an Scorp can become a detriment; (b) there are real tax ramifications in converting from Scorp to Ccorp status and; (c) in my experience, investors, rightly or wrongly, prefer the Ccorp form. So, the initial determination of legal form should be concerned, not only with the current position of the firm, but should involve forecasting future expectations, difficult as that may be.
About the author – Robin Beukers MBA CPA CMA CIA
I act as interim c.f.o., controller or special projects lead (for example, development and review of financial statements and internal controls, financial modeling, acquisition/funding risk assessment). Clients range from Fortune 100 level to startups.