How to Find out if a Business is an S-Corporation
A company's bottom line isn't the only indication of a wise investment; the business's corporate structure also goes a long way towards determining what dividends you will reap. S-corporations, named after Internal Revenue Service code Subchapter S, have a limited amount of shareholders and pass corporate taxes through to individual shareholders' income taxes. Before investing your money, find out what the corporate status of that business is and how that will affect your eventual dividends.
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Instructions
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Find contact information for the Secretary of State, or the government office in charge of regulating commerce throughout the state, for the state in which the business in question was incorporated.
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Contact the office of the Secretary of State in the business' state of original incorporation and ask to see a copy of the articles of incorporation, also known as the company's charter. After articles of incorporation have been filed, they become public record and may be accessed by any interested party. If there are no articles of incorporation to be accessed, then the business cannot be an S-corporation as it would need to be incorporated.
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Read the business' articles of incorporation to determine the corporate status of the business. The corporate status, whether the business is a partnership, sole proprietor or an S-corporation, should be included with the articles of incorporation.
Also, look for the number of shareholders, which is also listed in the articles of incorporation. S-corporations are not allowed to have more than 100 shareholders, so this is another good clue.
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Tips & Warnings
You may also be able to research whether or not the business has filed Form 2553 with the Internal Revenue Service, which is necessary for a business to be declared as an S-corporation. Contact your local IRS office and ask a representative to help you find out how to obtain this information.
