One reason many companies do not organize themselves as an S corporation is that this form of business
A) is subject to a higher tax rate than a general partnership.
B) does not provide owners with limited liability.
C) has a special eligibility restriction, which many businesses are unable to meet.
D) is much more difficult to set up than C corporations.

Question

Quizplus · Accepted Answer

S corporations have specific eligibility restrictions, such as limits on the number of shareholders and restrictions on who can be a shareholder, which many businesses cannot meet. This is a key reason why not all companies choose to organize as an S corporation.

One Reason Many Companies Do Not Organize Themselves as an S