What Do You Need to Know About Corp to Corp?
Another common reason an S corp might want to own a subsidiary is to protect a certain valuable asset from liability should the parent company come under legal trouble. They could distribute the asset to shareholders, but this opens the shareholders up to taxation and possible inconvenience in the responsibility of protecting the asset.
What makes a s Corp a disregarded entity?
S corps elect to be viewed as a sole proprietorship or disregarded entity when it comes to taxation but remain like corporations in every other sense. Sole proprietorships and disregarded entities are classified as pass-through entities because the company is not taxed on its profits.
