Robert is seeking additional capital to expand ABC Incorporated. In order to qualify ABC as an S corporation, which type of investor group could Robert obtain capital from?
A)30 different partnerships.
B)10 different C corporations.
C)90 nonresident individuals.
D)120 unrelated resident individuals.
E)None of the choices is correct.

Question

Quizplus · Accepted Answer

To qualify as an S corporation, the IRS has specific requirements including restrictions on the type and number of shareholders. S corporations can have no more than 100 shareholders, and shareholders must be U.S. citizens or resident individuals, estates, certain trusts, and tax-exempt organizations. Partnerships, C corporations, and nonresident aliens cannot be shareholders. Therefore, none of the provided options meet the criteria for S corporation shareholders.

Robert Is Seeking Additional Capital to Expand ABC Incorporated