The Maximum Number of Actual Shareholders in an S Corporation

question 79

Multiple Choice

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

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

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Definitions:

Compound Financial Instrument

A financial instrument that has characteristics that are a combination of a financial asset, financial liability or equity instrument.

Convertible Notes

Debt instruments that can be converted into a specified number of shares of the issuing company at certain times during its life, usually at the discretion of the note holder.

Liability

A present obligation of the entity to transfer an economic resource as a result of past events.

Equity

The value of an owner's interest in a property or business, after subtracting liabilities.