Which of the following statements about S corporations is MOST accurate?
A)S corporations enable owners to avoid the problem of double taxation.
B)S corporations can have an unlimited number of owners.
C)S corporations must have fewer than 5 employees.
D)S corporation are easier to set up than sole proprietorships and partnerships.

Question

Quizplus · Accepted Answer

S corporations enable owners to avoid the problem of double taxation. This means that S corporations are taxed only once, rather than being taxed at both the corporate and personal level like regular corporations. S corporations do have limitations on the number of shareholders they can have (no more than 100), but there is no minimum or maximum number of employees required. Additionally, setting up an S corporation requires more paperwork and formalities than setting up a sole proprietorship or partnership, so D is incorrect.

Which of the Following Statements About S Corporations Is MOST