Limited liability protection. Owners are not typically responsible for S corporation business debts and liabilities

• Easy transfer of ownership. Ownership is easily transferable through the sale of stock.

• Unlimited life. When a S corporation’s owner incurs a disabling illness or dies, the corporation does not cease to exist.

• Pass-through taxation in the corporate form. S corporation tax status avoids the “double-taxation” associated with C Corps and instead provides S corp owners with pass-through taxation benefits.

• Raise capital more easily. Additional capital can be raised by selling shares of stock.

• Credibility. S Corps may be perceived as a more professional/legitimate entity than a sole proprietorship or general partnership.

• Pro-rata distribution of profits. Under IRS S corp taxation rules, profits, losses and other pass through items are allocated based on each shareholder’s proportionate shares of stock.

• Income and losses passed through to shareholders. Income and losses of S corps are passed through to shareholders, similar to the way income and losses of partnerships are passed through to partners.

• Lower audit risk. Generally S corps are audited less frequently than sole proprietorship’s.

• Tax deductible expenses. Business expenses may be tax-deductible.

• Self-employment tax savings. An S corp can offer self-employment tax savings, since owners who work for the business are classified as employees.