S-corporation status usually benefits start-up companies anticipating losses,and highly profitable firms with substantial dividends to pay out to shareholders.

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S-corporation status allows for pass-through taxation, meaning the profits and losses are reported on the individual shareholders' tax returns rather than on a separate entity tax return. This can be beneficial for start-up companies that anticipate losses, as the losses can potentially offset the shareholders' other income. Additionally, highly profitable S-corporations with substantial dividends to pay out may benefit from the ability to distribute those dividends to shareholders without incurring double taxation.

S-Corporation Status Usually Benefits Start-Up Companies Anticipating Losses,and Highly Profitable