Justin's firm has been a corporation since its inception and is now an S corporation. He was excited about becoming an S corporation until he found out he is taxed just like an individual.
On the basis of the above scenario, answer the following questions:
Is it correct that Justin will be taxed like an individual now? Why or why not?
Justin says he can raise more capital as an S corporation? Is he correct? Why or why not?
Justin believes the management of an S corporation is structured just like that of a corporation. Is he correct? Why or why not?
Justin wants to go back to being a corporation. Can he do so? Why or why not?
If Justin wishes to change his status, must all of the shareholders agree? Why or why not?
An S corporation is similar to a C corporation. However, it cannot issue common stock.
Discuss why it is so. Justify your response with the help of reasoning and examples.