S Corp Status Requirements

There are certain qualifications that the corporation must meet to elect S corporation status. To qualify for S Corp status, your business:

• Must be a domestic corporation formed in the U.S.A.
• May have no more than 75 shareholders.
• May only have individuals, estates, or certain trusts as shareholders.
• May not have non-resident alien shareholders.
• May only have one class of stock.
• Must be a small business corporation, financial institutions (i.e. banks, insurance companies, building and loan associations, mutual savings, and loan associations) cannot take advantage of an S corporation election.
• Must conform to state statutory restrictions, which limit the transfer of shares/ownership of the company.