StudentShare solutions
Triangle menu

S Corporation vs. Corporation - Essay Example

Nobody downloaded yet

Extract of sample
S Corporation vs. Corporation

Incorporating as either of these provides shareholders with a number of tax and non tax advantages, which are gained by any company that is incorporated in either of these categories. Focusing on the tax issue, there is the fact that corporations are able in certain situations to help one in reducing their tax obligations. In states where the corporate tax is lower than individual income tax, one can incorporate thereby paying the lower corporate tax. Being a corporation allows the corporation to write down losses that may result from start ups, thereby reducing the tax burden that they have to meet. Corporations are also able to avoid tax by retaining income earned. This will limit the tax burden of the shareholders as well as the corporation. Though there are regulations in place that set a limit to the amount that can be retained without accruing taxation. The flipside that may exist as far as taxation of corporations goes is that of the double taxation effect. This is where the corporation gets to pay tax on its profit. The profit after tax that is then paid to shareholders as dividends is also taxed as income tax. This may be remedied if the corporation is recognized as an S corporation. The advantage of S corporations comes from the single taxation of the corporation’s income. ...
This will therefore increase the overall tax obligation of the shareholders (Lederman, 2002). There are various justifications that can be provided to the management for the election of scuba view Inc. to be a corporation. There is reduced tax obligation on the shareholders due to the reduced payment of tax on income. This is because corporations enjoy various deductions that other entities may not. One case is any company related expense may be expensed thereby reducing the income before tax. Also the income tax rate for individuals currently rests at between 10% and 39.6%. This is comparable to the current corporate tax rate that is between 15% and 35% (Landes, 2013). There is evidence suggesting that the effective rate that has been paid by corporations in terms of corporate tax has been dropping and it is quoted as being 31.9% by the financial times (Demos, 2012). The move towards making Lost and found Corp. an S corporation has been informed by the need to limit shareholders tax burden. In making this corporation into a designation S one, means that the shareholders still enjoy the benefits of a corporation without the need for double taxation. Shareholders who have lower tax rates can utilize this new designation to cut the tax that they pay the federal government. This is because in being an S corporation the shareholders only get to pay income tax on the income that the corporation pays to the shareholders. There is also the possibility to reduce the tax liability by retaining most of the income of the corporation. This retained income will only get taxed when it reaches a certain limit. For an entity to be recognized as an S corporation there are certain criteria that it must meet. To begin with the corporation is only limited to seventy five ...Show more
Cite this document
  • APA
  • MLA
(“S Corporation vs. Corporation Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
Retrieved from
(S Corporation Vs. Corporation Essay Example | Topics and Well Written Essays - 750 Words)
“S Corporation Vs. Corporation Essay Example | Topics and Well Written Essays - 750 Words”, n.d.
  • Cited: 0 times


S CORPORATION VS CORPORATION Name Institution Affiliation Date In business there are different types of companies that one can form. These are majorly classed depending on certain characteristics. One of these classes is a corporation. A corporation is a business entity that is autonomously recognized by the law and that has been incorporated…
S Corporation vs. Corporation
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"S Corporation vs. Corporation"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Target Corporation
Target Corporation is a widely traded stock and has seen more ups then downs. Target Corporation is a leader in the retail industry. Target Corporation will continue to be looked up to for corporations just starting out. There is a lot to learn from evaluating a company like Target Corporation.
5 pages (1250 words) Essay
Litigation involving Microsoft Corporation
A Discussion and Analysis of Litigation Involving Microsoft, Considering the Ethics of the Accusatory Companies, the Department Of Justice, and Microsoft Itself Litigation involving Microsoft Corporation in the past decade displays two practices that can be considered as not competitive or anticompetitive.
4 pages (1000 words) Essay
McDonald's Corporation
According to their Annual Report (2011), the company generates around 33 billion total assets (in terms of system wide sales) across all its franchising stores in the world. According to Brandz Top 100 Brand Ranking and Newsweek magazine, McDonalds indeed was the eight most famous and illustrious brand in the world with a brand value of $81,016 million.
8 pages (2000 words) Essay
CVS Caremark Corporation And Walgreens. Swot Analysis
The pharmacy services industry has historically been viewed as a safe haven for investors seeking steady growth and preservation of capital. However, things have changed a bit in recent times, owing to the aging American population and altered industry landscape.
12 pages (3000 words) Essay
Today we can easily access the foreign brands anytime and anywhere. The corporations on the other hand are striving hard to satisfy our needs and demands. Now the question arises, who are “We”? “We” of course constitute the market. “We” are the customers.
4 pages (1000 words) Essay
Discuss s 51(xx) of the Australian Constitution - the Corporation Power
The Australian Constitution defines the relations between the Federal and the State governments, presents fundamental guarantees in relation to religious tolerance,
11 pages (2750 words) Essay
Corporation law
Given the situation that they are now asked to pay back the three unsecured loans and that the partners are not able to do that at the moment, it is necessary to reveal the alternatives that the two friends should have appealed to in order to avoid a
6 pages (1500 words) Essay
Yahoo Corporation
As a multinational, many millions of people across the globe generate traffic monthly within the Yahoo properties. The corporation derives strategic competencies from the display and search digital advertising capabilities through which
4 pages (1000 words) Essay
Multinational Corporation Expansion
With a record of innovation spanning over ninety years, Raytheon Corporation provides mission systems integration, state of the art electronics, and other capacities in the areas of sensing, control, effects, command, intelligence, and communication systems; as
6 pages (1500 words) Essay
S- corporation
The corporation’s Built-in Gains tax for the year is $5,950. That is because the tax liability based on the taxable income ($5,950) is less as compared to the tax liability due to Built-in Gains ($8,750). The corporation’s Built-in Gains
1 pages (250 words) Essay
Comments (0)
Click to create a comment
Let us find you another Essay on topic S Corporation vs. Corporation for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us