Entity setup
Entity selection analysis
Sole prop, single-member LLC, multi-member LLC, S-Corp, C-Corp, partnership. We run the numbers on your situation and recommend the structure that fits the tax shape, ownership plans, and liability profile.
Entity setup
LLC, S-Corp, partnership — set up to actually work.
Most entity setup is templated and fine — until the first tax return reveals you elected the wrong structure for your income. We set up entities with the tax shape in mind from day one.
Online services file the paperwork. We file the paperwork and make the tax-strategy choices that come with it.
Why structure matters
The structure you pick affects every return you file under it.
Two reasons most owners get this wrong on day one.
The wrong structure costs real money.
A single-member LLC pays self-employment tax on every dollar of profit. An S-Corp can split that profit into salary + distributions, saving thousands in SE tax — but only when income clears a certain threshold. Get this right at setup, save every year after.
Some elections are time-sensitive.
The S-Corp election (Form 2553) has a 75-day window. Miss it and you're stuck with default LLC tax treatment for the year — or you file a late election with extra justification paperwork. Doing this right at setup avoids all of that.
What's included
What goes into a clean entity setup.
Different businesses need different pieces. Most setups touch these.
Entity setup
Minnesota Secretary of State filing
Articles of organization (LLC) or articles of incorporation (corp). Name search, filing, certified copy.
Entity setup
EIN application
Federal employer identification number from the IRS. Usually same-day online; sometimes 4–6 weeks if the IRS routes the application offline.
Entity setup
S-Corp election (Form 2553)
When the math says it saves SE tax, we file the election within the 75-day window. Late elections are recoverable but need paperwork.
Entity setup
First-year compliance setup
Bookkeeping setup (QuickBooks), business bank account opening prep, first estimated payments, and Minnesota annual renewal calendar.
Lawyer coordination
Operating agreements + legal docs
Operating agreements, bylaws, and partnership documents are attorney work. We'll point you to a trusted lawyer when those are needed and make sure the tax setup matches what they draft.
The tax math behind entity choice
When an S-Corp election starts paying off.
An S-Corp can save thousands in self-employment tax — but only past a certain income threshold, and only when the tax savings outweigh the added cost and complexity of running one.
$60K
The threshold
For most service businesses, the math starts working around here.
Below this range, the cost and complexity of running an S-Corp usually outweighs the tax savings. Above it, the savings start adding up fast — sometimes thousands per year.
How the savings work
Splitting income between salary and distributions.
- You pay yourself a reasonable salary (subject to payroll taxes)
- Remaining profit comes out as distributions (not subject to SE tax)
- You skip the 15.3% SE tax on the distribution portion
- Savings scale up as profit grows
What it costs you
S-Corps add real complexity.
- Separate tax return required (Form 1120-S)
- Payroll setup and ongoing payroll filings
- Reasonable-compensation rules the IRS scrutinizes
- Harder to take losses against other income
What we do
We run the actual numbers on your net profit, reasonable salary range, payroll cost, and separate-return cost — and tell you whether the tax savings actually outweigh the added cost. The election isn't forever; we revisit it as your business grows. Below the threshold? An LLC or sole prop usually fits — we set those up too.
Common questions
What people ask us about this.
Often paired with
Related services on the menu.
BOI filing
BOI Filing (FinCEN Beneficial Ownership Reporting)
The Corporate Transparency Act requires most LLCs and corporations to file Beneficial Ownership Information with FinCEN.
ExploreCash flow planning
Cash Flow Planning and Forecasting
Most owners look at the bank balance and feel a vague sense of whether things are okay.
ExploreAnnual reports
Annual Reports and Corporate Maintenance
Every Minnesota LLC and corporation has to file an annual renewal with the Secretary of State.
ExploreSet up the structure that fits the next five years.
The cost of changing entity structure later is meaningfully higher than picking the right one up front. Get it set up once, correctly.