According to the United States Internal Revenue Service, "S corporations are corporations that elect to pass corporate income, losses, deductions and credit through to their shareholders for federal tax purposes." An S corporation is formed when the shareholders agree to elect S corporation status with the IRS. This is accomplished through the filing of IRS Form 2553 "Election by a Small Business Corporation." The form must be signed by all of the corporation's shareholders.
What are the Requirements for Forming an S Corporation?
To qualify for S corporation status, the corporation must: