A key feature of S corporations is that:
A) their owners have unlimited liability.
B) their stockholders must be U.S. citizens or permanent residents of the United States.
C) they operate as nonprofit organizations.
D) they cannot enter into contracts, own property, or take legal action in their own names.

Question

Quizplus · Accepted Answer

S corporations can only have limited number and type of shareholders, and all shareholders must be U.S. citizens or permanent residents of the United States. This is a key feature of S corporations as it ensures that only certain individuals or entities can participate in the ownership of the corporation.

A Key Feature of S Corporations Is That