What are the requirements for an S-Corp election?

Electing S-Corp status requires meeting several IRS eligibility rules before you file, and all shareholders must agree to the election. The main requirements are: - Eligible entity: Your business must be a domestic corporation or LLC eligible to elect S-Corp status. - Shareholder limit: The company can have no more than 100 shareholders. - Shareholder eligibility: Shareholders must be US citizens or residents (certain trusts and estates are also allowed). Corporations, partnerships, and nonresident aliens cannot be shareholders. - One class of stock: An S-Corp can only issue one class of stock, meaning all shares carry identical rights to distributions and liquidation proceeds, though voting rights can differ. - Unanimous shareholder consent: Every shareholder must consent to the election by signing Form 2553. - Timely filing: You must file Form 2553 within 2 months and 15 days (commonly referred to as roughly 75 days) after the start of the tax year in which you want the S-Corp election to take effect, or at any time during the prior tax year. Meeting all of these requirements is necessary both to elect S- Corp status and to keep it in good standing afterward.