Running head: MEMORANDUM
To: Jones and Turner
From: Oliver Curtis
Subject: S Corporation Requirements
We have been advised that you would wish to redefine your business structure to a more
favorable S Corporation structure. Your interests have been closely linked to an S Corporation
because you have finally understood that this basic business structure is commonly referred to as
a flow-through entity. In terms of taxation, an S Corporation structure allows one to forego
income taxation. In this Memorandum, I am going to highlight the critical requirements needed
while structuring your business as an S Corporation, provide you with at least two merits and
demerits, and provide an understanding of hoe income taxation occurs. Finally, I will provide the
IRS form requirements and S Corporation corporate officers' requirements.
To establish your company as an S Corp, there are several simple conditions to be met.
First of all, the company must be an organization domestically or qualify as an organization. This
implies that a limited liability Company (LLC) is eligible to be established as an S Corp.
Therefore your company is not allowed to have over 100 shareholders. According to Reynolds
(2017), these shareholders must be entities, people, or exempted firms. They must not be
corporations, associations, or non-resident individuals. Yo...
15 Million Students Helped!
Sign up to view the full answer