Jeanne, a Canadian citizen, would like to invest in Ingrid's startup. If Ingrid organizes her business as a(n) _____, Jeanne is prohibited from investing.

Question

Quizplus · Accepted Answer

S corporations are restricted to a maximum of 100 shareholders, and only U.S. citizens** or resident aliens may be shareholders. Therefore, as a Canadian citizen, Jeanne would not be allowed to invest in an S corporation.

**Note: While there are exceptions for certain trusts, estates, and entities owned by U.S. citizens or resident aliens, for the purposes of this question, we assume Jeanne does not fall under these exceptions.

Jeanne, a Canadian Citizen, Would Like to Invest in Ingrid's