Legal Entities in Optometry: S Corporation

An S corporation represents the optometry practice that has incorporated a partnership mainly for tax purposes. The S corporation combines the advantages of a partnership and the advantages of a corporation. It is an independent legal entity that can own assets, incur debts, and live as long as it is profitable. While a C corporation pays tax on its net income, an S corporation passes through its net income to its shareholders and each shareholder pays tax on his income based on his individual income tax rate and the part he owns in the company. Like a corporation, an S corporation provides liability protection that a partnership cannot offer.

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