Annual S-Corp Compliance

As a business owner, forming an S-Corporation (S-Corp) can offer powerful tax advantages and protect your assets, but maintaining that protection requires more than just incorporating once. To remain compliant, avoid IRS penalties, and preserve your limited liability status, you must complete several annual compliance steps, some of which are filed with state or federal agencies, and others that must be maintained internally.

At OMI Legal, a business and intellectual property law firm based in Atlanta, Georgia, we support founders, entrepreneurs, and small business owners in staying legally sound while they scale. Below is a breakdown of what every S-Corp owner needs to know.

What Is an S-Corporation?

An S-Corporation is not a separate business entity like an LLC or C-Corp. It’s a tax election made by eligible corporations or LLCs that allows profits (and some losses) to pass directly to owners’ personal income without being subject to corporate tax rates.

To elect S-Corp status, businesses must file IRS Form 2553:
➡️ Form 2553 – Election by a Small Business Corporation (IRS)

Once the election is accepted, the business must comply with ongoing legal and tax requirements each year.

Required Annual S-Corp Filings:

While every S-Corp must maintain internal documents, the mandatory government filings include the following:

• IRS Form 1120-S. This is your annual income tax return as an S-Corp. It reports income, deductions, and shareholder distributions.
• Due dDate: March 15 each year (unless extended)
• Where to file: IRS
• Who prepares it: Usually, a tax professional
• Includes Schedule K-1s for each shareholder, which must also be distributed to them.
• ➡️ Form 1120-S Instructions (IRS)
• Georgia Annual Registration
• What it is: A required state filing to confirm your business is active and compliant
• Due date: April 1 annually
• Where to file: Georgia Secretary of State's Corporations Division
• ➡️ Georgia Annual Registration Filing Portal
• Fee: $50 (for-profit corporations)

You’ll confirm or update your company’s business address, registered agent and, officers and directors. Failure to file may result in administrative dissolution of your corporation.

Internal Documents Required for Compliance

Though not filed with the IRS or the State, the following documents are legally required to be maintained and updated. They’re essential for protecting your corporate veil, passing audits, securing financing, or selling the company.

Annual Board Meeting Minutes

A written summary of your yearly board meeting, covering key decisions, officer elections, compensation approvals, and any formal resolutions. These minutes must be kept in your corporate records. Even if you’re the sole shareholder, it’s still best practice to document your actions as formal minutes.

Corporate Resolutions

Formal statements of decisions made by the board. Common resolutions include:

Approving officer salaries

• Issuing or transferring shares
• Opening a business bank account
• Entering into contracts or leases
• We recommend preparing resolutions at least annually, especially for compensation and ownership changes.

Bylaws

Your corporation’s bylaws are its internal operating rules. If you’re missing this document, it’s time to adopt one. Bylaws outline how the business is governed, including:

Duties of officers and directors

• Voting rights
• Meeting procedures
• Shareholder rights
• Bylaws are not filed with the state, but must be signed and stored with your records.

Shareholder List & Stock Ledger

Every S-Corp must maintain an accurate record of:

Shareholders' names and addresses

• Number of shares issued
• Date of issuance
• Transfers or redemptions
• The stock ledger is the legal proof of ownership and is required for audit, sale, or legal challenges.

Salary Approval Documentation

S-Corps are required to pay “reasonable compensation” to any shareholder-employee.
To formalize this, a board resolution approving officer salary should be adopted and retained annually. This supports your tax strategy and demonstrates compliance in case of IRS review.

Business Activity Summary & Compliance Review

We recommend preparing an Annual Compliance Report, especially for companies planning to grow, raise funds, or undergo audits. This report can outline:

Major business changes

• Governance updates
• Legal gaps
• Recommendations for improvement

Additional IRS Requirements (When Applicable)

Form 941 for payroll tax reporting (if you have W-2 employees)

Form 1099-NEC for independent contractor payments over $600

Form 940 for federal unemployment tax (if applicable)

W-2s for officers receiving salary

What Happens If You Don’t Comply?

Failure to meet your annual obligations could result in:

Penalties from the IRS

• Late filing fees
• Loss of your S-Corp status
• Piercing of the corporate veil (loss of liability protection)
• Difficulty securing funding or transferring ownership
• How OMI Legal Can Help

At OMI Legal, we offer flat-rate and ongoing general counsel services to ensure your S-Corporation remains in good standing every year. Whether you’re a solopreneur or managing multiple shareholders, we’ll help you prepare:

Annual minutes & resolutions

• Updated bylaws
• Stock ledger & shareholder records
• Board-approved salary documentation
• Georgia and IRS compliance filings
• A clear Annual Compliance Report with legal recommendations

Based in Atlanta, GA, we serve businesses across Georgia and beyond with a commitment to strategic, accessible legal support for entrepreneurs and growing brands.

Ready to Get Compliant?

Let’s make sure your business stays protected and poised for growth.
Schedule your free legal consultation at www.omilegal.com to get started today.

Resources:

• IRS S Corporation Overview
• Georgia Secretary of State: Corporations Division
• IRS Form 1120-S
• IRS Form 2553 – Election by a Small Business Corporation