Subchapter S Corporations

A Subchapter S Corporation (S Corp) is a type of business structure that combines the benefits of a corporation with the tax advantages of a partnership. It allows income, deductions, and credits to pass directly to shareholders, avoiding double taxation at the corporate level. S Corps have restrictions on the number and type of shareholders and must meet specific IRS requirements. They are popular among small to medium-sized businesses seeking liability protection without the double taxation of traditional corporations, making tax reporting simpler while providing legal protection for owners' personal assets.