• QUALIFYING FOR "S" STATUS
• S CORPORATIONS VS. OTHER STRUCTURES
• FURTHER READING:

Known formally as subchapter S corporations, a name derived from the section of the U.S. tax code dealing with them, S corporations are small business corporations specially designated by the Internal Revenue Service (IRS). They must meet several criteria in order to qualify.

Like all corporations, S corporations are distinct legal entities from their owners, and thus provide limited liability protection to the owners and officers during bankruptcies, lawsuits, and other claims against the company's revenue or assets. The primary advantage that an S corporation has over an ordinary C corporation is that its profits are not taxed...