Form with which a corporation may resolve to alter its corporate status top that of a subchapter (S) corporation.
S Corporation With One Shareholder In San Diego
State:
Multi-State
County:
San Diego
Control #:
US-0046-CR
Format:
Word;
Rich Text
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FAQ
But the Internal Revenue Code does place several restrictions on who can be shareholders in order for the corporation to qualify to be an S corp. Shareholder restrictions: S corps are restricted to no more than 100 shareholders, and shareholders must be US citizens/residents.
HUSBAND AND WIFE WILL BE TREATED AS SOLE SHAREHOLDERS OF S CORPORATION STOCK HELD IN TRUST.
With certain exceptions, a corporation is treated as having only one class of stock if all outstanding shares of stock of the corporation confer identical rights to distribution and liquidation proceeds. The regulations then elaborate on how to analyze if there are identical distribution and liquidation rights.
Because of the one-class-of-stock restriction, an S corporation cannot allocate losses or income to specific shareholders. Allocation of income and loss is governed by stock ownership, unlike partnerships or LLCs taxed as partnerships where the allocation can be set in the partnership agreement or operating agreement.
No, an S Corp doesn't need two owners. A one owner S Corp is perfectly legal and quite common. The IRS allows S Corporations to have up to 100 shareholders, but there's no minimum requirement.
An S corporation's annual tax is the greater of 1.5 percent of the corporation's net income or $800.