Corporation Jeopardy

S-Corp

100

What is the limit of Shareholders? 

100 or less shareholders

200

Can anyone own shares in an S-Corp?

As long as they are an individual and not another corporation, yes. 

300

Who is has the tax burden of an S-Corp?

The Corporation is in charge of taxes.

400

Please name 1 advantage and 1 disadvantage of an S-Corp

Advantages:

• May decrease the self-employment tax burden on members of an LLC
• Helps C Corporations avoid the sting of double taxation
• Provides personal liability protection for business owners 
• Allows LLCs to retain their ease of administration 
• Allows for transfer of ownership 
• Supports a cash accounting method 
• Boost the credibility of the business

Disadvantages:

• S Corporations may not have more than 100 shareholders
• An S Corp may come under closer scrutiny by the IRS and other tax authorities
• There is no uniform S Corporation tax treatment across states 
• Only eligible domestic corporations and LLCs qualify for S Corp status
• Partnerships, corporations, and non-resident aliens are ineligible
• Because of the flow-through taxation (business income taxed at the individual tax rates) with the S Corporation, shareholders of a corporation may end up in higher tax brackets
• Subchapter S Corporations must adopt a calendar year as its tax year
• Only one class of stock allowed
• Owners who do substantial work for a Subchapter S Corporation are considered employees, which brings greater payroll responsibilities

500

What form does a S-Corp need to fill out? 

IRS form 2553

C-Corp

100

A C- Corp is the most common____________.

For-profit Corporation

200

Who is in charge of discussing taxes/paying for taxes in a C-Corp? 

The Corporation

300

Who is in charge of the day-to-day operations of the Corporation? (Board of ______)

Board of Directors

400

Who has Liability even if the person is involved in the day-to-day management? 

The Corporation

500

How does a C-Corp become Formed? (What does the Corporation need to file to the state office?)

Articles of Incorporation

Non-Profit

100

Who pays taxes for a Non-profit Corporation? 

No one; these companies are tax-exempt. 

200

Non-Profit companies are generally run for what purpose? 

Non-Profits provide a service to the community in some facete. 

300

What is one of the disadvantages of being part of a Non-Profit organization?

Significant filing requirements through the State AND Federal Levels to establish and maintain tax-exempt status.

400

What is the special legal entity formed under the IRS code? 

Section 501(c)(3)

500

Can a nonprofit corporation engage in political campaigns? 

No. Due to tax exemption, no funding can go to a political party.

Prof. Corp

100

What are the ramifications of being in a professional corporation? 

You must be licensed in your profession. 

200

Give 3 examples of Professional Corporations. 

Physicians, doctors, law firms, accounting, architects, engineers, electricians. 

300

What is a common miss conception that happens with Professional Corporations? 

People belief a Union and a Professional Corporation are the same thing. 

400

Why do professionals join a Professional Corporation? 

It takes Liability off of the individual

500

Are there any advantages tax advantages to being part of a Professional Corporation? 

No. The taxation is the same of C-corp, S-corp

Misc.

100

In Tennessee it's illegal to drive if you are what? 

asleep

200

American Do what 22 times a day?

open a fridge.

300

Name a country that doesn't allow tattoos.

Iran and Japan

400

What is Scotland's National Animal?

Unicorn?

500

What country invented the Caesar Salad?

Mexico