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Incorporate your business - ·"S" Corporations. "S" Corporations. "S" corporations are most often used by service oriented businesses, who want the "limited liability" feature of the corporation, but do not want the tax consequences of a "C" corporation. These owners want to pay dividends to themselves, because significant amounts of corporate income are not needed for capital needs such as inventory and equipment. The special "S" election allows the owners to pay the dividends without paying the "double tax" problem that occurs when dividends are paid out of a regular "C" corporation.
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