The Maximum Number of Actual Shareholders in an S Corporation

question 51

Multiple Choice

The maximum number of actual shareholders in an S corporation is:

• A) 75.
• B) 100.
• C) 200.
• D) Some other number.
• E) Unlimited.

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Definitions:

Warrants

Financial derivatives that provide the right, but not the obligation, to buy or sell a security at a specific price before a certain date.

Security Offering

The process of making new shares of a company available for sale to the public or specific investors, often to raise capital.

Shares Outstanding

The total number of shares of a corporation's stock that are owned by shareholders, including restricted shares.

Security

A financial instrument that represents an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.