Who can Form an S Corporation?

When a Corporation makes the 2553 election with the IRS to be treated as a S Corporation there are several restrictions that dictate who can be a shareholder of that S Corporation: 

  • S corporations may not have more than 100 shareholders.
  • Shareholders must be resident citizens of the United States.
  • S corporations can have only one class of stock.
  • S corporations cannot be owned partially or wholly by other Corporations, LLCs, Partnerships or Trusts.
  • Most states require shareholders be 18 or older.

For more information regarding the requirements of each state, view the state guide forum in our Education Center.