S - Corporation - Explained

The video explains the tax selection of an S corporation, which allows for pass-through taxation under subsection S of the Internal Revenue Code, avoiding double taxation. To qualify, all shareholders must agree to the S selection, be human, and be US citizens or certain trusts. The corporation can have up to 100 shareholders, with families often counted as one. Only one class of shares is allowed, typically common shares. This structure benefits small to mid-sized businesses with its tax advantages.

What limitations exist regarding the classes of shares in an S corporation?

Why might the S election be particularly advantageous for small to mid-sized businesses?