Question

What is an S corporation, and how is it different from a C corporation?

Answer 1

Answer:

S corporation

• S corporation is a privately held corporation that has a limited liability that does not need to pay any income taxes.

• The income, profit, and loss of this corporation is instead shared and passed to the shareholders of the corporation.

• These shareholders then personally report their losses and profit on their own income tax return.

C corporations

• C corporations have many differences from S corporations. C corporations can have multiple classes of stocks whereas the S corporation is authorized to single class.

• C Corporation cannot be possessed by the S corporation. Similarly, C corporation can have unlimited shareholders while the S corporation can have up to 100 shareholders.

Answer 2

Answer: a c corporation is the traditional way of being taxed. Instead, the s corporation provides a different way of being taxed which is not corporate but rather individual.

Explanation: