S Corporation

An S Corporation is a form of business that allows its owners the benefit of liability protection.   Ownership of the business resides in the hands of the shareholders who hold stock in the corporation.  Managers will be elected or appointed to manage the day to day affairs of the business.  S Corporations do not pay the “double tax” that  C Corporations pay  so long as they meet the criteria to be taxed under Sub-chapter S of the Internal Revenue Code.  Instead, the profits or losses are divided and passed through to the shareholders.  An S Corporation is subject to the Tennessee Franchise and Excise Tax and must also pay an annual filing fee in order to operate within the state of Tennessee.  This type of business has more state tax and filing requirements, but it does provide the shareholders with some liability protection that is unavailable to sole proprietorships and general partnerships.

This information is provided to you so that you might understand the basics of the most common business structures available in Tennessee.  The choice of a business structure is affected by many variables.  The information provided on this webpage is not intended to operate as an exclusive source of information.  Please contact us for assistance in determining what structure might work best in your particular case.

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