I have feverishly been reporting about provisions of the One Big Beautiful Bill Act and have left my multi-part series on Subchapter S adrift at sea. Accordingly, I want to sneak in one more article in this Subchapter S series before turning my attention back to the Act.
Single-Class-of-Stock Requirement
In accordance with Code § 1361(b)(1)(D), an S corporation may not have greater than one class of stock. The key to only having one class of stock is generally to make sure that all outstanding shares have identical rights to distribution and liquidation proceeds. That concept, however, may be easily said, but it may be difficult to fully grasp, implement and monitor. In this blog post, I aim to synthesize the complexities of this monumental rule of Subchapter S into an understandable set of guidelines.