An S-Corp is Not a Legal Entity

I cannot tell you how many times someone has told me they want to create an S-Corp, or register their business as an S-Corp, or form an S-Corp.

But here's the thing. When you register your company as a legal entity with the State of Texas, S-Corp is not an option. Why? Because an S-Corp not a legal entity! It's a taxing classification with the IRS.

If you found this blog post because you also wanted to "form an S-Corp," (a) you're not alone, not by a long shot, and (b) you're not an idiot - there's a lot of confusing misinformation on the internet around this topic, and it's specialized knowledge known primarily to business lawyers and accountants.

And luckily for you, now I am here to set the record straight.

A corporation can be taxed as an S-Corp (if it satisfies certain criteria).

An LLC can be taxed as an S-Corp (if it satisfies certain criteria).

But you cannot register your company with the State of Texas as an S-Corp. (I haven't looked into other states - I practice in Texas and know this to be true in Texas - but I suspect it's true across the country)

If you want to take advantage of the deductions available to a business taxed as an S-Corp, you'll need to:

1/ register your business as an LLC or corporation (LLC is typically the easiest to register and maintain), and

2/ talk to your accountant about filing an S-Corp election with the IRS.

And if/when you are ready to take the first step to being taxed as an S-Corp, we would love to help you register your LLC. Just click here to get started.

Author: Ashley Lewkebandara, attorney and cofounder of Your LLC Attorney, published 01 June 2025