Tax Savvy for Small Business - Essay Example

 If an organization has attained the status of an S corporation, its shareholders have the option of offsetting the losses experienced by the company with income tax. Another benefit that Northwest Brands can obtain by attaining the status of an S corporation is that if the tax that is levied on the shareholders is less than the tax that is levied on the corporation, the corporation can pass on its tax on the shareholders and this helps the corporation in saving money for future use. To qualify as an S corporation, a company needs to fulfill certain requirements. To qualify as an S corporation an organization should be recognized as a local organization, it should not be recognized as a member of different affiliated corporations, it should have less than 100 shareholders, and should be operational with only one type of stock even if the voting rights have not been awarded to all the shareholders and the shareholders of the organization should be locals and no foreign nation national should be a shareholder in the organization.