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Forming an S-Corporation for an Online Business

Asked by: Stacy - 25 April, 2011 Can I form an S corporation for an internet only digital goods business?
Answered by: Alex Zehn - 26 April, 2011 Dear Stacy,

Yes, an S-Corporation would be a fine type of entity to form for your business. But, before incorporating, consider some of the limitations of the S-Corporation, such as, for example, the limited number of shareholders allowed and limits on transfers of ownership. It may be that a better way to go would be to form an LLC.

Our company is an online-only business and we have operated successfully as an LLC for several years. If you want a better-known example, Amazon is also an LLC (although they do own a corporation by the same name too).


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