S corporations - prerequirements

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 S corporations’ pre-requirements 

·         Shareholders must be US citizens or residents of the United States.

·         Shareholders may only be individuals, certain trusts, estates, and certain exempt organizations (such as a 501(c)(3) nonprofit).

·         Shareholders may not be partnerships, corporations, or non-resident alien shareholders.

·         Have 100 or fewer shareholders. Family members and their estate count as one shareholder

·         Have just one class of stock.

·         All shareholders must consent to the election.

In general, any corporation or LLC that meets the below requirements may apply. LLCs should simply interpret the rules for a “shareholder” as for a “member”.


For more details see 26 USC - IRC §1361


Currently, I am an MBA student at EIU. This blog will follow my studies in Corporate taxation

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