Many people think the “s” in S Corporation means small, but it stands for Subchapter S in the Internal Revenue Code. This type of business is limited to less than one hundred shareholders and offers protection from liabilities for them. The income generated by the corporation goes directly...
Subject to approval and removal of status by the IRS: On rare occasions, the IRS may terminate an S corp’s Subchapter S status if an S corp either doesn’t properly allocate profits and losses or makes any other noncompliance moves, such as mistakes in an election, consent, notification,...
Each LLC member’s share of profits and losses, called a distributive share, should be set out in the LLC operating agreement. 3. S corporation: An LLC can choose to pay taxes as an S corporation (also called an S subchapter) tax classification by submitting the IRS Form 2553. Here, ...