Subchapter S Corporation

Advantages of Subchapter S Corporation
  • Legal entity separate from individuals
  • Limited personal liability
  • Continuity of existence
  • Continuity of management
  • Readily transferable interests
  • Possible separation of ownership and management
  • Net operating loss deductible by shareholders

Disadvantages of a Subchapter S Corporation
  • Only one class of stock outstanding
  • Process of incorporation requires more time and money than other forms of organization
  • S-Corporations are monitored by federal, state and some local agencies, and as a result may have more paperwork to comply with regulations.
  • Inflexibility of operations