Question

Svelter Corporation does not face the problem of double taxation as the Internal Revenue Service (IRS) does not tax the earnings of the company separately. Instead, taxes are only levied on the personal income of the stockholders. A limitation, however, is that the company is only allowed to have a maximum number of 100 stockholders at a time. Given this information, Svelter Corporation is a(n) _____.

Answer 1

Answer: S Corporation

Step-by-step explanation:

S corporation is one of the type of corporation that helps in meet the specific requirement, limited liabilities and the internal revenue in an organization. The following are the main benefits or advantage of the S corporation are as follows:

• Easy cash accounting method
• Pass by using the taxation process
• Tax favorable
• It helps in protecting the company's assets

According to the given question, the Svelter corporation is one of the type of S corporation that basically facing the double taxation issue in the form of internal revenue services in an organization.

Therefore, S corporation is the correct answer.

Answer 2

The answer is: An S Corporation

Step-by-step explanation:

An S Corporation is a small business corporation. The main characteristics of an S Corporation are:

• All its shareholders must be legal residents in the US.
• It can only have up to 100 shareholders.
• All shareholders must be individuals.
• Profits and losses are passed on to shareholders and distributed in proportion to their stake in the corporation.
• Some trusts and estates that are eligible for certain tax exemptions can be shareholders in an S Corporation.