The key feature that distinguishes an S corporation is the tax advantages it offers. It’s called an S corporation because it has elected to be taxed under Sub chapter S of the Internal Revenue Code, making it a “pass-through” entity for tax purposes. Otherwise, it’s a for-profit corporation, incorporated under and governed by the same state corporation laws as a C corporation (or a corporation that was not eligible for S corporation tax status or whose shareholders chose not to elect that status).
An S corporation offers similar liability protections, ownership, and management advantages as a C corporation.
