For the complete documentation index, see llms.txt
For the complete documentation index, see llms.txt
What are the shareholder eligibility requirements for an S-Corp election?
S-Corp shareholders have to meet specific IRS eligibility rules, since not every owner or entity type is allowed to hold shares in an S-Corp.
## Citizenship and residency:
Shareholders must be US citizens or US residents.
## Allowed shareholder types:
Beyond individuals, certain entities like trusts and estates can also hold shares.
## Not allowed as shareholders:
Corporations, partnerships, and nonresident aliens cannot be S-Corp shareholders.
These restrictions exist alongside the other S-Corp election requirements, such as the 100-shareholder cap and the one-class-of-stock rule, so it's worth confirming all of your shareholders qualify before filing Form 2553.