Question

What is the maximum number of shareholders allowable for eligibility as an S corporation for the current year? How has this limitation changed over time?

Answer 1

Qn : What is the maximum number of shareholders allowable for eligibility as an S corporation for the current year?   

Answer:

The maximum number of shareholders allowable for eligibility as an S corporation for the current year is 100.

Qn : How has this limitation changed over time?

Answer:

Congress wrote and passed the tax rules that allow S corporations in 1958. At that time, an S corporation could have up to 10 shareholders. The number of allowed S corporation shareholders was increased to 15 in 1976. Every few years the number was increased until it reached the current 100 at the end 2004. A reason to increase the number of S corporation shareholders was to allow family-owned businesses to keep control as the number of family member shareholders grew.