S corporation
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Overview
An S Coporation or Subchapter S or S Corp is a form of corporation that meets the U.S. IRS requirements to be taxed under Subchapter S of the Internal Revenue Code. Any profits earned by the corporation are not be taxed at the corporate level, but instead are taxed as personal income by the shareholders. To qualify as an S Corporation, the following requirements must be met by the company:
- Must be a domestic corporation.
- Must not have more than 100 shareholders.
- Shareholders must be U.S. citizens or residents (no corporate shareholders)
- Must have only one class of stock.
- Profits and losses must be allocated to shareholders proportionately to each ones interest in the business.
