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What are the Advantages of an S Corporation?

Limited Personal Liability

  • This limits the liability of the owners/investors to only the amount of their investment. The owners of a corporation are not personally liable for business debts, claims, or other liabilities.

Perpetual Existence

  • The existence of a corporation is considered perpetual, although it can be terminated voluntarily by its owners (shareholders).

Better fringe benefits

  • While all business entities can provide fringe benefits to its owners and/or employees, the C Corporation allows for a greater range of benefits.

Pass-Through Taxation

  • The S Corporation does not have a separate tax status from its owners (shareholders). Instead, the income is allocated to the personal income proportional to his or her ownership interest.

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