by LawInc Staff
January 7, 2023
S corporations are extremely popular among actors and celebrities. But why?
Here are five benefits actors and celebrities again by using S corporations for their endeavors:
1. Asset Protection
S corporations are separate legal entities, for liability purposes.
This means that, as long as the corporation is properly formed and maintained, it can protect the actor from being held personally liable for things like breach of contract.
This is particularly important for actors for celebrities with high net worth and want asset protection against lawsuits.
2. Tax Savings
S corporations can offer significant savings on self-employment taxes.
Specifically, S corporations allow the ability to choose what salary will be paid by the corporation to the actor.
The ability to control how much of the money made, allows the actor to minimize the amount of FICA and Medicare taxes they pay.
This can be very beneficial for high-income earners like actors and celebrities.
3. Management & Ownership Flexibility
Corporations are allowed to have multiple shareholders (owners) and provide flexibility in management structure.
This can be helpful for actors and celebrities who want to start a company with others who have the option to participate in the management of the S corporation.
Thinking of bringing on investors or adding other owners to your business?
Corporations and LLCs are great vehicles for attracting others to participate with you in your business venture.
Incorporation or forming an LLC shows that you take your business seriously, want to protect yourself, and handle your business the right way.
4. Growth & Expansion Potential
S corporations can issue stock to multiple shareholders (owners) which allows for business growth and expansion.
For example, the S corporation could be used to raise capital or bring on investors to facilitate growth of the S corporation.
Starting a corporation or LLC for your business can provide credibility and motivate others to trust and do business with you.
5. Professional Image
Operating through an S corporation can project a professional image and convey success and stability.
This can be especially important to actors and celebrities that want to create a strong and professional brand for their business endeavors.
6. Corporate Credit
S corporations have their own credit and credit scores that are separate from that of their owners.
This is helpful since the business can eventually access funds (e.g., loans and financing) for business expenses without having to rely on owner personal credit.
LawInc is Here to Help Start Your S Corporation
If you need help setting up an S corporation or LLC, LawInc is here to help. Affordably work one-on-one with an S corporation specialist to ensure you start your S corporation the right way.
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