S-Corporation Definition



S-Corporation Definition - S Corp

Business Definition - S Corporation - S Corp

S-Corporation Definition - S Corp-A corporation with 75 or fewer shareholders, that has elected and qualified for a special tax status with the Internal Revenue Service (IRS). The main advantage associated with the S-Corporation is that the income passes through to the shareholders, therefore avoiding a perceived double taxation of a C-Corporation.

An "S Corporation" is a corporation that elects to be taxed under Subchapter S of the Internal Revenue Code (enacted in 1958 and periodically amended) and receives IRS approval of its request for Subchapter S status. As a legal entity (an artificial person), the S Corporation is separate and distinct from the corporation's owners (the stockholders).




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