S CORPORATION

The name used to describe a common type of for-profit corporation that is organized under state law, denoting that the shareholders have received subchapter S corporation status from the Internal Revenue Service. The S Corporation is thought of the small corporation since it is generally available for a limited number of shareholders (usually 75 and with citizenship requirements) who have the benefit of being taxed like a partnership or sole proprietor instead of double taxation that is used in a C corporation (a tax on corporate profits and then also on distributions made to shareholders which are taxed on personal income tax statements.)