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InvestHub.com's
Finance Dictionary and Glossary of Investment Terms

Subchapter S (S Corporation)  

Definition 1.

A corporation that meets the requirements for, and has made a proper election to be taxed under, Subchapter S of the Internal Revenue Code. This gives the corporation the option of being taxed as if it were a partnership (income is taxed to the shareholders, rather than to the corporation itself). In order to qualify, a corporation must be a small business corporation. This means the following requirements must be met: 1) Must be a domestic corporation 2) Must not have more than 75 shareholders3) Must include only eligible shareholders 4) Must have only one class of stock
 
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