Business Law - "S" Corporations
Hybrid
to a regular corporation and partnership:
- have
board of directors.
- probably
have restrictive transfer language, so shareholders can’t
sell to just anyone.
- most
of tax is flow-through, only taxed at shareholder’s rate.
- can
only have less than 35 investors, must be actual person, a corporation,
trust,
etc.; cannot be a shareholder.
- only
one class of stock allowed – no distinction between
shareholders.
- must
apply for subchapter S status from the IRS.
- limited
liability.