LYCOS RETRIEVER 
S Corporation: Owners
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The ownership of an S corporation is restricted to no more than 75 shareholders. S corporations cannot be owned by C Corporations, other S Corporations, many trusts, LLCs or partnerships. Lastly, an S Corporation can not have non-U.S. citizens as shareholders.
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LIMITED LIABILITY Like C corporations, S corporations are considered to be separate entities apart from their owners for all purposes except taxation. This means that debts incurred by the corporation are the responsibility of the corporation, not its shareholders, who can only be held accountable up to the amount they invested in the corporation. If the corporation does not possess enough assets to pay its debts, the shareholders will not be required to make up the difference out of their own pockets. In addition, if the corporation is sued, liability rests on the shoulders of the corporation, not its shareholders.
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The stock of S corporations is freely transferable, while the interest (ownership) of LLCs is not. This free transferability of interest means the shareholders of S corporations are able to sell their interest without obtaining the approval of the other shareholders. In contrast, member of LLCs would need the approval of the other members in order to sell their interest. Lastly, S corporations may be advantageous in terms of self-employment taxes in comparison to LLCs.
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S corporations can only have 100 shareholders. None of the shareholders can be nonresident aliens, nor can they be other corporations or LLCs. S corporations must ... follow corporate procedures and have no flexibility in dividing profits among owners (e.g. if John owns 29% of XYZ, Inc., he is only able to make 29% of the profits).
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Ownership: A Corporation is owned by its shareholders. Shareholders can be individuals or other entities such as another Corporation, trust or a limited liability company. Although a Corporation usually has more than one owner, it is possible for only one individual to create and own 100 percent of the Corporation.
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One big difference between S corporations and LLCs is that owners of an LLC can distribute profits in the manner they see fit. For example, assume Adam and Bart own an LLC to which Adam contributed $80,000 in capital and Bart only contributed $20,000. If Bart performs 80% of work the owners could still decide to split the profits 50/50. If these same partners owned an S Corporation, Adam would be required to take 80% of the profit and Bart only 20%.
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