S corporation

Definition of "S corporation"
  1. A profit-oriented corporation that has received subchapter S status from the IRS, allowing its shareholders to have limited liability and to be taxed as a pass-through tax entity, similar to a partnership or sole proprietor, while adhering to certain IRS rules
How to use "S corporation" in a sentence
  1. The business owners decided to form an S corporation to enjoy the benefits of limited liability and avoid double taxation.
  2. The S corporation had to ensure that all of its shareholders were U.S. citizens to maintain its status.
  3. A limit of 100 shareholders is one of the eligibility requirements for an S corporation.

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