With a Subchapter S corporation
A) income is taxed as direct income to stockholders.
B) stockholders have the same liability as members of a partnership.
C) the number of stockholders is unlimited.
D) life of the corporation is limited.

Question

Quizplus · Accepted Answer

With a Subchapter S corporation, income is taxed as direct income to stockholders, which means the corporation itself is not taxed on its income. Instead, the profits and losses "pass through" to the shareholders, who report them on their individual tax returns.

Answer: B
 Stockholders in a Subchapter S corporation have the same limited liability protection as members of a regular corporation. This means they are not personally responsible for the corporation's debts or legal obligations.

Answer: C
 The number of stockholders in a Subchapter S corporation is limited to 100, and they must all be U.S. citizens or residents.

Answer: D
 The life of a Subchapter S corporation is not limited by law, but it may be affected by the death or withdrawal of a stockholder, who may have to sell their shares or transfer them to someone else.

With a Subchapter S Corporation