Michael owns stock in an S corporation based in the U.S. He has told his friend Juan about the company, and now Juan wants to invest in the company. Juan is a Mexican citizen who lives in northern Mexico. In this scenario, Juan will be allowed to own stock in the company.

Question

Quizplus · Accepted Answer

S corporations in the U.S. have restrictions on ownership, including that shareholders must be U.S. citizens or residents. Since Juan is a Mexican citizen living in Mexico, he would not be eligible to own stock in an S corporation.

Michael Owns Stock in an S Corporation Based in the U.S