Which Statement Is Incorrect with Respect to an S Shareholder's

question 24

Multiple Choice

Which statement is incorrect with respect to an S shareholder's consent?

• A) An S election requires a consent from all of the S corporation's shareholders.
• B) Both husband and wife must consent if one owns the stock as community property.
• C) A consent extension is available only if Form 2553 is filed on a timely basis, reasonable cause is given, and the interests of the government are not jeopardized.
• D) A consent must be in writing.
• E) None of the above statements is incorrect.

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Definitions:

Illegal Term

A provision in a contract or agreement that is not enforceable by law because it violates legal statutes or principles.

Sale of Business

The process of transferring ownership of a business from one party to another.

Restrictive Covenant

A clause in a contract which limits certain actions of the parties, often used in employment and real estate agreements.

Restraint of Trade

Legal contracts or agreements that restrict one party's right to engage freely in business or trade, intended to protect business interests.