Talk:S corporation/Archives/2012

Protection from creditors only?

S corporation provides many of the benefits of partnership taxation and at the same time gives the owners limited liability protection from creditors.

Does it protect from creditors or also shield owners' personal assets from lawsuits against the business? Crasshopper (talk) 17:21, 24 February 2009 (UTC)

That is the general meaning of "limited liability:" that shareholders are not personally liable for the debts of the entity except under veil-piercing theories. --Rickcolosimo (talk) 21:59, 4 November 2009 (UTC)

This was the very first time I've ever heard anything about an S-corp differing from a C-corp in terms of liability protection. I'd like to see some substantiation of this. Usually liability protection is more a function of the Articles of Incorporation, which are the same for both S-corps and C-corps. — Preceding unsigned comment added by 96.228.234.239 (talk) 19:26, 9 April 2012 (UTC)

S corporation status has nothing to do with "protection from creditors." I'll change the article. Famspear (talk) 01:45, 10 April 2012 (UTC)

OK, I deleted the extraneous material. It appears that the material was introduced with this edit: [1]. Again, this is an article about a U.S. federal income tax concept (S corporations). The personal liability -- or non-liability -- of a shareholder for the debts of a corporation is indeed a function of the law of the state in which the corporation is created, and has nothing to do with the corporation's status as a S corporation or a C corporation. It appears that the editor who introduced the material may have introduced it because he or she mistakenly thought that somehow this misconception was widely held. I don't see the need for the Wikipedia article to address it. Famspear (talk) 02:01, 10 April 2012 (UTC)