I am starting a small business with a partner holding equal equity. Can I file as an s Corp with a partner. Minnesota
2 Answers from Attorneys
You can but I would advise against it.
I usually find LLC the preferred entity for small business set up, and
recommend that a 2 person company NEVER share 50/50 ownership, due
to major problems in the event of deadlock.
I am afraid that you misunderstand a corporate entity. If you have a corporation, the tax election is to be taxed as a subchapter S. The owners (equity holders) are shareholders, not partners. if it is an LLC, the owners are members. You must consult with an attorney.
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