S corporation
- 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
- The business owners decided to form an S corporation to enjoy the benefits of limited liability and avoid double taxation.
- The S corporation had to ensure that all of its shareholders were U.S. citizens to maintain its status.
- A limit of 100 shareholders is one of the eligibility requirements for an S corporation.
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