S Corporation

What is the definition of S Corporation? Learn what you need to know about this term.

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What is an S Corporation?

An S Corporation (S Corp) is a type of corporation that meets specific requirements set by the IRS, allowing it to be taxed as a pass-through entity like a partnership or sole proprietorship instead of as a separate entity like a C Corporation.

It has limitations on ownership and restrictions on the types of businesses it can conduct.

An S Corp can have only one class of stock and a maximum of 100 shareholders.