Question

The advantage to an S corporation is a. its offering of multiple classes of stock. b. its treatment of shareholders for income taxation purposes. c. its ability to attract an unlimited number of shareholders. d. its ability to have partnerships and corporations invest as shareholders.

Answer 1

Answer: Option B

Explanation:

S corporation is the company which comes under internal revenue code. S corporation companies passes the income, losses, credit through the shareholders for the purpose of federal tax. These companies have limited liability and need not pay double taxation.

For the purpose of tax benefit the S corporation companies pass all the deductions through their shareholders. With reasonable division substantial amount of tax can be savings. S corporation has better credibility and it is a well recognized business structure.