S Corp vs. C Corp

Been in the deep dive of reading through countless VDRs since starting my position about a month ago. I've been seeing most businesses listed as either S Corps or C Corps. My high-level understanding is this: 

C Corps are separate taxable entities (taxed at the corporate and individual level) with no restrictions on corporate ownership or stock distribution

S Corps are pass-through taxation entities (i.e. no income tax is paid at the corporate level) but with restrictions on corporate ownership and stock distribution

I was curious if there are any nuances that would be important to understand when evaluating a business and its financials, either as an S Corp or C Corp.  

 
Most Helpful

You hit on the main differences. Also, if you do see S-Corps in an org structure, it is worth considering if you should do an F-Reorg. Long story short, if at any time the S-Corp did something to lose its status and this wasn’t officially recognized, that can create issues. An F-Reorg basically “resets” the S-Corp so the subsequent buyer only has to deal with any potential issues this side of the reorg. This is a niche tax consideration that probably doesn’t matter for your purposes but it is worth knowing that this is a thing

 

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