An S Corp guide to ownership requirements and restrictions.
S Corps have been around since the 1950s, and are a popular way, many small, mid size and even large businesses, choose to legally structure their business organizations. However, a great deal of confusion exists around who, what, and how the S Corp ownership rules work.
Only 1 owner is permitted.A distinct advantage of S Corps over most partneship entity forms, is that generally, it may have just 1 owner. In my experience, as well as, several statistical studies found online, the majority of S Corporations have only 1 owner.
100 is the maximum (sort of)Generally, the maximum number of owners an S Corp could have is 100. Practically speaking, certain legal maneuvers taking advantage of the lack of ownership restriction to physical (real) persons, may be utilized to increase the number of de facto owners past the 100 numerical threshold.
The meaning of owner matters.Generally, ownership to an S Corporation, is limited to real persons and certain trusts.