Question: A new client has come into your office and needs advice.Her and her three friends went to a lawyer and had a corporation set up

A new client has come into your office and needs advice.Her and her three friends went to a lawyer and had a corporation set up last month, two of them will own 100 shares and the other two 150 shares each based on the very minimal cash contributed to the corporation. They will buy and sell antiques and collectibles on eBay.They may need some more start up money than they put in for capital and two of the shareholders have substantial assets so they will make loans to the corporation as needed. They have questions on sharing profits, employee benefits plans ( some need medical insurance), loaning money back and forth with the corporation.They may not be very profitable in some years as the antique market is a hit or miss situation.Their attorney referred them to you to discuss the tax implications of electing an S Corporation.

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