scenarios. Corporations that com- pensate owners too much or too little may find themselves under audit. Regardless of entity type, an owner’s compensation should always be commensurate with his or her skills, experience and busi- ness involvement. The right decision For businesses that qualify (see sidebar), an S corporation conver- sion may be a wise move. But, as noted, there are rules and risks to consider. Also, as of this writ- ing, there are tax reform proposals under consideration in Washington that could affect the impact of a conversion. CTDA helps you succeed in your business through a variety of programs and services that include educational opportunities, webi- nars, and discounts on shipping, client collection services, telephone charges, auto rentals, and more. CTDA offers networking and relationship- building opportunities through participation in Total Solutions Plus all-industry conference and Coverings annual trade show. Membership in CTDA also increases your national exposure and gives you access to the annual member- ship survey, a valuable resource to evaluate your company in terms of profit improvement, employee compensation, distribution and com- pany performance. The CTDA website, CTDA Educational Opportunities, Weekly Newsletters andTileDealer Blog are all free resources that will “keep you in the loop” as well. CTDA is always looking for ways to improve the benefits of membership. To learn more about membership, please contact info@ctdahome.org or 630-545- 9415 visit the website at www.ctdahome.org. Like CTDA on Facebook and Twitter @Ceramic Tile Distributors Association (CTDA). Which companies can elect S status? Not every private business is eligible to be an S corporation. In order to elect S status, a com- pany must: • Be a domestic corporation • Have only allowable share- holders (individuals, certain trusts and estates, but not part- nerships, corporations or non- resident alien shareholders) • Have no more than 100 share- holders • Have only one class of stock, and • Not be an ineligible corpora- tion, including certain financial institutions, insurance compa- nies, and domestic internation- al sales corporations All shareholders must consent to the S election by signing Form 2553, “Election by a Small Business Corporation.” ©2017 BUSINESS TIP ––––––––––––––––––––––––––––––––––––––––––––––––––––––– 28 TileLetter | November 2017