Question
Celia, age 30 is leaving a major systems development company to establish her own firm. She will design computer-based systems for small- and medium-sized businesses.
Celia, age 30 is leaving a major systems development company to establish her own firm. She will design computer-based systems for small- and medium-sized businesses. Celia will invest $100,000 in the business. She hopes to operate near her breakeven point during her first year, although a small loss is possible. Profits will build up slowly over the next four years until she is earning $150,000 a year in her fifth year.
Celia has heard about S Corporations and asks you whether the S Corporation form would be advisable for her new business.
How would you respond to Celia's inquiry?
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