NII
National Install, Inc. NATIONALINSTALL.COM
Corporate Formation
S-Corporation · Cap Table · Filing Structure
National Install / App / Corp / Formation

Legal & Tax Structure

S-Corporation.
One Class of Stock.
Five Owners. One Vision.

National Install, Inc. is structured as an S-Corporation — pass-through taxation, no corporate-level double tax, and a simple cap table built for five owners who are all U.S. individuals. Here's why, and exactly how the equity breaks down.

Why S-Corp Over C-Corp
S-Corporation Selected
  • Pass-through taxation — income taxed once, at the shareholder level, not twice
  • No 21% corporate-level federal tax before distributions
  • Active owners can take a reasonable salary + distributions, reducing self-employment tax exposure
  • Losses pass through and can offset shareholders' other personal income during ramp-up quarters
  • Likely qualifies for the Section 199A 20% QBI deduction (roofing/contracting is not a specified service trade)
  • Simple structure fits 5 individual U.S. shareholders with one class of stock
C-Corporation
  • Corporate income taxed at 21% federal first
  • Dividends to shareholders taxed again at the personal level — double taxation
  • No pass-through of early losses to offset shareholders' other income
  • Better suited for raising venture capital or going public — unnecessary complexity for this ownership group
  • More complex reporting and board requirements
S-corp eligibility requirements: 100 shareholders max, all U.S. individuals/eligible trusts, one class of stock only. National Install's 5-owner structure with straightforward percentage splits fits cleanly within all three limits.
Capitalization Table
ShareholderRoleEquity %Capital Contribution
Josh Morales
Investor
 Capital partner — International Van Lines relationship 20% $100,000
[Investor 2 — Name Pending]
Investor
 Capital partner 40% $100,000
Chris
Principal / Founder
 Founder & CEO — operational control 20% Sweat Equity
Brother 1 (Age 19)
Family
 Family equity holder 10% Family Share
Brother 2 (Age 20)
Family
 Family equity holder 10% Family Share
TOTAL100%$200,000 + Sweat/Family
Open item: Investor 2's name and the exact basis for the 40%/20%/10%/10% split should be confirmed and documented in the shareholder agreement before filing. The two $100K checks (Josh + Investor 2) total $200,000 in outside capital against 60% combined equity, with the remaining 40% held by the operating principal and family.
Formation Steps
1

Articles of Incorporation

File in state of incorporation, naming National Install, Inc. and authorized share structure (one class, common stock).

2

EIN Registration

Obtain Employer Identification Number from the IRS for banking, payroll, and tax filing.

3

Form 2553 — S-Election

File IRS Form 2553 within 75 days of incorporation (or start of tax year) to elect S-corp status.

4

Shareholder Agreement

Document equity %, capital contributions, distribution policy, and transfer restrictions for all 5 owners.

5

Bylaws & Stock Ledger

Corporate bylaws, stock certificates issued per the cap table, and initial board resolution.

6

State & Local Licensing

Register for state tax accounts, business licenses, and operate under the contracted roofer's existing license per state (TN first).

Required Filing Documents
📄

Articles of Incorporation

State-filed founding document establishing the corporation.

🧾

IRS Form 2553

S-corporation tax election, signed by all shareholders.

📋

Corporate Bylaws

Internal governance rules — officer roles, meeting cadence, voting.

🤝

Shareholder Agreement

Equity %, vesting (if any), buy-sell terms, distribution policy.

🏦

EIN Confirmation Letter

IRS-issued tax ID for banking and payroll setup.

📑

Stock Ledger / Certificates

Records issuance of shares matching the cap table above.

This page outlines the formation structure for planning purposes. Final documents should be prepared and filed with a corporate attorney and CPA to ensure compliance with state-specific requirements and IRS S-election deadlines.