S corporation

Related Terms
Type of the US corporate structure in which the firm's income is passed through its stockholders (shareholders) in proportion of their investment, and taxed at personal income tax rates. S corporations ('S' stands for 'small') can have only one type of stock and only a limited number of stockholders. Also called subchapter S corporation.

For more information, see The Difference between an S Corporation and an LLC.

Use 'S corporation' in a Sentence

When you are running a small business you should consider whether it makes sense to change over to an S corporation in order to save money on taxes.
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Mary's accountant reminded her that as a stockholder of an s corporation, she would have to report any earnings from that stock on her personal income taxes, but owning part of a small business was worth it.
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I was owning and operating my own small business and then suddenly I realized I could save money in taxes if I was declared an S Corporation.
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