Who Will Typically Elect the S Corporation Status?
Typically entrepreneurs will select the S-Corporation as the entity of choice for the following reasons:
- The S-Corporation combines the advantages of the sole proprietorship, the partnership, the LLC and the corporation into one entity.
- Unlike sole proprietors and the partners in a partnership the shareholders of the S-Corporation are granted the same level of limited liability and personal asset protection as are the shareholders of a corporation.
- The S-Corporation allows shareholders to avoid the “double taxation” levied on shareholders of C-Corporations that is because all of the income or losses in a S-Corporation are reported only once on the personal income tax returns of the S-Corporation’s shareholders.