Also known as a Subchapter S Corporation. An eligible domestic corporation that generally avoids double taxation (taxation at both the entity and stockholder level) by electing to be treated as an S-corporation and complying with certain requirements under the IRC (such as the number, type and residency of stockholders). An S-corporation is a pass-through entity for tax purposes, which means that it generally does not pay an entity level tax. Instead, the S-corporation's profits and losses generally pass through to its stockholders, who include their respective share of those items on their income tax returns (whether or not the profits or losses have been distributed).

For more information on S-corporations, see Practice Note, Taxation of S-Corporations.