Forums: Discussions for entrepreneurs and small business.

Hi everyone, I've been trying to find some answers and I keep finding conflicting answers when I search.

Here's the situation:

I'm trying to form a sole shareholder S-Corp that makes software.  However, this will be a part-time job for me, since I already do have a full-time job, meaning that I'm expecting very little (relatively speaking) revenue.

I did some research and found that I would technically be an employee, since I'm actually writing the program myself.  In this situation, would I be required to pay myself a salary, or can I somehow withhold my salary?  Some people suggest I do have to pay a salary, while others state I don't.

The problem is that since very little revenue is expected, I can't even pay myself minimum wage.  I would literally have to reinvest the check I get to pay my next check, all the while getting taxed on it.

Is there any advise on this situation?

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I think you must give yourself sometime. You start try some software for your personal use. Use some free apps software portal and upload it there. Check how many people are downloading.

You can measure your success from there and then go with full blast if you feel you can really generate some good ROI.

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mikazuki,

One of the "features" of an S corp is that the company must pay "fair" wages to the owners.  Since revenue will be low - you may want to consider a different structure.

If you want to discuss your specific situation, drop me a PM or contact me directly

 

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

Hi everyone, thanks for the replies!

 

@FaaastCash I've done some preliminary exploration, and there does seem to be some interest.  However my field is very volatile, so it's hard to ascertain how this will actually translate into revenue.

 

@RobertJ

The reason I'm choosing a corp structure is because of the limited liability, but also because I see my business getting bought out by a bigger company as a realistic alternative goal.  The reason I'm choosing an S-corp specifically is so that I can deduct the initial overhead (mostly software licensing) from my income from my full-time job. The first product launch is scheduled in about 9 months worth of time, which means there will be absolutely no income until then.

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mikazuki,

Consider an LLC as an initial structure.

 

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

I think I should add that I don't plan on taking any dividends from the business until it is actually operating with a cash flow.

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