Final answer:
Robert could not obtain capital from any of the proposed investor groups (30 partnerships, 10 C corporations, 90 nonresident individuals, or 120 unrelated resident individuals) while qualifying ABC as an S corporation, because they all fail to meet the specific IRS criteria for S corporation shareholders.
Step-by-step explanation:
Robert is seeking additional capital to expand ABC Inc. and needs to determine which type of investor group he could obtain capital from while qualifying ABC as an S corporation. In order to qualify as an S corporation, a company must meet certain Internal Revenue Service (IRS) criteria which include limitations on the number and type of shareholders. Here are the requirements:
- Must be a domestic corporation
- Can have no more than 100 shareholders
- Shareholders must be individuals, certain trusts, or estates
- Cannot have shareholders that are partnerships, corporations, or non-resident alien shareholders
Given these limitations, option 4), which includes 120 unrelated resident individuals, is not viable since it exceeds the 100 shareholder limit. Option 1) which includes 30 different partnerships, option 2) which encompasses 10 different C corporations, and option 3) which involves 90 nonresident individuals are also disqualified because the types of investors are not permitted as shareholders under the S corporation rules.
Therefore, the correct answer is option 5) None of these. None of the proposed investor groups meet the criteria to qualify ABC as an S corporation.