How to Start an S-Corp in Oklahoma

Oklahoma, popularly known as The Sooner State, offers a bunch of benefits for business owners, especially the state capital Oklahoma City has a lot to offer to the rising entrepreneurs in the state. If you want to start a business in Oklahoma, you must choose an appropriate corporate structure. You can have a corporation or a sole proprietorship or set up an LLC in Oklahoma. There are a few guidelines that you should be aware of when it comes to starting an S-Corporation. In Oklahoma, S-Corporation is businesses’ most common corporate structure, especially start-ups. It was developed in order to give companies limited liability protection while preserving the advantages of being a distinct legal organization.

In this article, you will learn about how to start an s-corporation in Oklahoma. You will also learn whether an s-corporate business structure suits your business. Please read all the points carefully before starting your business in Oklahoma.

What is an S-Corp in Oklahoma?

An S corporation (S-corp) is not a type of corporate entity, unlike a limited liability company (LLC) or other business structures. It’s a tax classification that might result in significant financial savings for both corporations and LLCs but in different ways. S-corp is similar to LLC, except that the IRS treats it as a corporation for tax purposes.

If you want an S corp status for your business, you can always form an LLC to protect your personal assets from business debts. It takes some basic steps to have a successful s-corporation in Oklahoma. S-Corps do pay corporate income taxes, but they are still treated as disregarded companies for federal tax purposes.

S-corps pay corporate taxes that LLCs do not have to pay. If you want to have an S-corp status, then we would recommend you have an LLC instead. This will protect your personal assets from your business liabilities and you don’t have to pay any corporate taxes.
–LLCBuddy Editorial Team

Limitation and Requirements of S-Corp in Oklahoma

As you have decided to have an S-Corp structure for your business, you must know the limitations and requirements to qualify for S-Corp status. We have listed some important points to consider following for your reference-

Be a domestic corporation.
Not be an ineligible corporation, such as specific financial institutions, insurance providers, or domestic corporations engaged in overseas sales.
Have just one type of stock.
Have a maximum of 100 shareholders or members.
Have only permitted individuals, certain trusts, and estates as stockholders or members.

If you are qualified for the limitations and requirements, you can apply for an S-Corp in Oklahoma.

How to Start an S-Corporation in Oklahoma?

To create S-Corp in Oklahoma, you must follow the below guidelines that include forming a business name, hiring a Registered Agent, filing your Articles of Organization, creating an operating agreement in Oklahoma, requesting an EIN, filing a form 2553.

Step 1: Register a Business Name in Oklahoma

After you have decided on the idea to start an S-Corp in Oklahoma, deciding the name for your corporation is significant. Legal procedures should be taken into account when choosing your partnership name. Choose a business name that will enable you to develop a strong brand identity.

If you want to set up an LLC, there is a complete guide on Oklahoma LLC name guidelines for a proper LLC name. Here are some guidelines you must follow while naming your S-corp.

Avoid profanities
The name should be available, and no other entity should have the same name in Oklahoma.
Limit of restricted words that need a license in Oklahoma, for example, doctors, attorneys, etc.
Do not use a business name that sounds like a government agency or entity (like “police,” “county,” and “state”)

Step 2: Hiring the Oklahoma Registered Agent

The next step in starting an S-corp in Oklahoma is hiring a Oklahoma Registered Agent, a person that accepts legal paperwork on behalf of your business. This person or business will receive important tax forms, legal documents (such as subpoenas), all notices of lawsuits, and other official government correspondence in Oklahoma. Forming an LLC and an S-corp will be easier if you have Registered Agent in Oklahoma.

Step 3: File Your Oklahoma Articles of Organization

The Articles of Organization is an important document to start your limited liability company (LLC). Oklahoma Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization. In order for the “Articles of Organization” to be filed, you need to pay a filing fee to the state. In Oklahoma, the filing fee is $100.

In California, along with the Articles of Organization, you must send the Statement of Information to file your company. The statement of information is a mandatory document in California, but other states do not have this document.

Step 4: Creating an Operating Agreement in Oklahoma

After you have filed your Articles of Organization in Oklahoma, the next step is to create an LLC operating agreement in Oklahoma. The Oklahoma LLC operating agreement is essential and necessary since it will cover your corporation’s important documentation and rules. The operating agreements usually include the following-

Article I: Organization
Article II: Management and Voting
Article III: Capital Contributions
Article IV: Distributions
Article V: Membership Changes
Article VI: Dissolution

After creating the LLC operating agreement, you can benefit in several ways since it will discuss how decisions for the business will be made, including management and member voting structure. For more details about how an operating agreement works, please check Operating Agreement.

Step 5: Request for EIN in Oklahoma

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your general partnership. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Oklahoma can be through the following:

Apply Online- You can apply for EIN online, the most desirable and fastest method for users.
Apply by Fax- Another method of obtaining EIN is to fax Form SS-4 (PDF) after entering all the correct information to (855) 641-6935.
Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

If you would like to be assisted in getting an EIN in the Internal Revenue Service, we can get your EIN for you. Our EIN service is quick and hassle-free. For more details about EIN for your business, check why you need EIN.

Step 6: File Form 2553 for Your S-Corp Business in Oklahoma

Once you have obtained your EIN and Articles of Organization to form an S-Corp, you must file Form 2553, Election by a Small Business Corporation, to apply for S-corp status. Filing a form 2553 should be done 75 days after the formation of your S-Corp, or not more than 75 days after the beginning of the tax year in which the election is to take effect.

If your LLS-Corp has passed the deadline of 75 days, you must also file Form 8832, Entity Classification Election, in order to opt to be taxed as a corporation. Then you would send Form 2553 and Form 8832 jointly by certified mail from the USPS. In Oklahoma, you can send your form 2553 to the Department of the Treasury Internal Revenue Service Center – Ogden, UT 84201 Fax: 855-214-7520 .

Advantages of Starting an S-Corporation in Oklahoma

Filing an S-Corp in Oklahoma has numerous benefits and advantages.

Writing Off Losses: With S-corp, owners can deduct business losses from their individual income statements. If the company loses money in the first few years, it may balance its other sources of revenue. Even so, understand the shareholder loss limitations set by the IRS.

Pass-Through Taxation: Starting an S-Corp is the widely known advantage in forming this kind of business structure since an s-corp uses a pass-through taxation structure. The company does not pay twice the tax in this kind of taxation. Because of this structure, most start-ups and entrepreneurs in Oklahoma apply for an S-Corp LLC.

Qualified Business Income Deduction: A qualified business income, or QBI, is the total of all qualified items of income, gain, deduction, and loss from any qualified trade or business, including S-Corp. With this, S corp owners may deduct up to 20% of their eligible earnings under the Tax Cuts and Jobs Act.

FAQs

What is the process of forming an S-Corp in Oklahoma?

To form an S-Corp in Oklahoma, you must file Articles of Incorporation with the Oklahoma Secretary of State and pay the filing fee. You must also create a corporate bylaw, designate a registered agent, obtain an Employer Identification Number, and hold an initial meeting of the board of directors.

What is the filing fee for an S-Corp in Oklahoma?

The filing fee for an S-Corp in Oklahoma is $100.

Is there an annual fee for S-Corps in Oklahoma?

Yes, there is an annual fee for S-Corps in Oklahoma. The annual fee is $25.

Are there any other fees for S-Corps in Oklahoma?

Yes, there are other fees for S-Corps in Oklahoma. These fees include franchise tax, business privilege tax, and sales tax, depending on the type of business.

Do I need a registered agent for my S-Corp in Oklahoma?

Yes, you must designate a registered agent for your S-Corp in Oklahoma. This person will be responsible for accepting legal documents on behalf of the corporation.

Is there a minimum number of shareholders for an S-Corp in Oklahoma?

Yes, there is a minimum number of shareholders for an S-Corp in Oklahoma. The minimum number of shareholders is one.

Do I need to hold an initial meeting of the board of directors for my S-Corp in Oklahoma?

Yes, you must hold an initial meeting of the board of directors for your S-Corp in Oklahoma. The purpose of this meeting is to approve the bylaws and appoint officers.

What type of taxes do S-Corps in Oklahoma have to pay?

S-Corps in Oklahoma have to pay federal income tax, state income tax, payroll taxes, and state and local taxes.

How often do S-Corps in Oklahoma have to file taxes?

S-Corps in Oklahoma must file taxes annually.

Is there an annual filing requirement for S-Corps in Oklahoma?

Yes, S-Corps in Oklahoma must file an annual report with the Oklahoma Secretary of State. The filing fee for this report is $25.

What paperwork do I need to file for my S-Corp in Oklahoma?

You must file Articles of Incorporation, a corporate bylaw, and an Employer Identification Number with the Oklahoma Secretary of State.

What other documents do I need to form an S-Corp in Oklahoma?

You must also create a corporate bylaw, designate a registered agent, obtain an Employer Identification Number, and hold an initial meeting of the board of directors.

Does an S-Corp in Oklahoma have to have a separate bank account?

Yes, an S-Corp in Oklahoma must have a separate bank account.

Is there a minimum capital requirement for an S-Corp in Oklahoma?

No, there is no minimum capital requirement for an S-Corp in Oklahoma.

Do I need to file a DBA for my S-Corp in Oklahoma?

No, you do not need to file a DBA for your S-Corp in Oklahoma.

Does my S-Corp in Oklahoma need to have a business license?

Yes, your S-Corp in Oklahoma must have a business license.

Is there a minimum age requirement to form an S-Corp in Oklahoma?

No, there is no minimum age requirement to form an S-Corp in Oklahoma.

Does my S-Corp in Oklahoma need to have a registered office address?

Yes, your S-Corp in Oklahoma must have a registered office address in Oklahoma.

What are the benefits of forming an S-Corp in Oklahoma?

An S-Corp in Oklahoma can offer liability protection, tax savings, and flexibility in management structure.

What are the disadvantages of forming an S-Corp in Oklahoma?

An S-Corp in Oklahoma can be more expensive to form and maintain than other business structures, and there are more formalities and restrictions that must be followed.

Do I need a business plan for my S-Corp in Oklahoma?

Yes, you should create a business plan for your S-Corp in Oklahoma that outlines your goals and objectives.

What is the best way to advertise my S-Corp in Oklahoma?

The best way to advertise your S-Corp in Oklahoma is to use a combination of online and offline marketing tactics, such as social media, print advertising, and word of mouth.

How can I find a lawyer to help me form my S-Corp in Oklahoma?

You can find a lawyer to help you form your S-Corp in Oklahoma by searching online or contacting the Oklahoma Bar Association.

How do I find a registered agent for my S-Corp in Oklahoma?

You can find a registered agent for your S-Corp in Oklahoma by searching online or contacting the Oklahoma Secretary of State.

How long does it take to form an S-Corp in Oklahoma?

It typically takes 7-10 business days to form an S-Corp in Oklahoma.

What are the reporting requirements for an S-Corp in Oklahoma?

An S-Corp in Oklahoma must file an annual report with the Oklahoma Secretary of State and must file federal and state taxes annually.

What is the penalty for not filing taxes for my S-Corp in Oklahoma?

If you fail to file taxes for your S-Corp in Oklahoma, you may be subject to penalties and interest.

Is there a penalty for not filing an annual report for my S-Corp in Oklahoma?

Yes, there is a penalty for not filing an annual report for your S-Corp in Oklahoma. The penalty is a fine of up to $100.

Is there a penalty for not having a registered agent for my S-Corp in Oklahoma?

Yes, there is a penalty for not having a registered agent for your S-Corp in Oklahoma. The penalty is a fine of up to $200.

What are the steps to start an S-Corp in Oklahoma?

To start an S-Corp in Oklahoma, you’ll need to register your business with the Oklahoma Secretary of State, file Articles of Incorporation, obtain an Employer Identification Number (EIN), and obtain any necessary business licenses and permits.

What are the advantages of forming an S-Corp in Oklahoma?

Forming an S-Corp in Oklahoma offers several advantages, including potential tax savings, limited liability protection, and flexibility in how the business is structured.

Are there any fees associated with starting an S-Corp in Oklahoma?

Yes, there are several fees associated with starting an S-Corp in Oklahoma, including a filing fee for the Articles of Incorporation and any applicable business license fees.

What other legal requirements do I need to meet to form an S-Corp in Oklahoma?

Depending on your business, you may need to meet additional legal requirements such as obtaining a certificate of good standing, filing an annual report, and holding shareholder meetings.

Why Oklahoma S Corporation is So Important

First and foremost, the S Corporation structure provides business owners with the best of both worlds – the liability protection of a corporation combined with the tax benefits of a partnership. This means that owners are not personally liable for the debts and liabilities of the business, while also being able to pass profits and losses directly through to their individual tax returns.

Moreover, forming an S Corporation in Oklahoma also allows business owners to avoid double taxation. Unlike traditional corporations, where profits are taxed at both the corporate level and at the individual level when distributed as dividends, S Corporations pass through profits to shareholders and are only taxed at the individual level. This can result in substantial tax savings for small business owners.

Furthermore, S Corporations also provide flexibility in terms of ownership. In Oklahoma, an S Corporation can have up to 100 shareholders, whereas traditional C Corporations have no such limit. This means that S Corporations are more suitable for small businesses with a limited number of owners, making them an attractive option for entrepreneurs looking to start a business with a small group of partners.

Additionally, forming an S Corporation in Oklahoma can also enhance credibility and professionalism for the business. By choosing the S Corporation structure, business owners signal to customers, suppliers, and investors that the business is serious about its operations and committed to long-term success. This can help attract clients and partners who may prefer working with established and reputable companies.

Moreover, S Corporations in Oklahoma also offer various other benefits, such as the ability to provide tax-deductible benefits to employees, including healthcare and retirement plans, as well as potential tax savings through deductions for business expenses. These benefits can help small business owners attract and retain top talent, as well as reduce the overall tax burden on the business.

In conclusion, the Oklahoma S Corporation is an important and valuable business structure for entrepreneurs in the state. From liability protection and tax benefits to flexibility in ownership and enhanced credibility, forming an S Corporation can offer a wide range of advantages for small business owners. If you are considering starting a business in Oklahoma, forming an S Corporation may be the right choice for you.

Conclusion

In conclusion, starting an S-corp in Oklahoma is a strategic choice for entrepreneurs seeking the benefits of limited liability and favorable tax treatment. One can successfully establish an S-corp by following the outlined steps, including selecting a unique name, filing the Certificate of Incorporation, obtaining necessary licenses, and adhering to state-specific regulations. Ultimately, this corporate structure offers a strong foundation for business growth and protection, making it a worthwhile consideration for those looking to launch a venture in Oklahoma.