Which of the following is a requirement for an S Corporation?

An S Corporation is a special type of corporation that meets specific Internal Revenue Code requirements. One of the critical requirements for an S Corporation is that all shareholders must consent to the S Corporation status. This means that every individual or entity that holds shares in the S Corporation must agree to elect and maintain the S Corporation tax status. This requirement ensures that all shareholders are on board with the taxation and regulatory structure that accompanies this designation since S Corporations are typically taxed differently from regular corporations (C Corporations).

To clarify why other options do not fit, the maximum number of shareholders for an S Corporation is up to 100, not 200. Additionally, while certain restrictions exist regarding the nationality of shareholders, S Corporations can have U.S. citizens and residents as shareholders, not solely foreign citizens. Furthermore, S Corporations are limited to one class of stock, meaning they cannot issue different types of stock with varying rights or privileges. This single class of stock requirement helps maintain uniformity in how income and distributions are passed through to shareholders.