An S corporation, or S corp, is a type of corporation that is permitted under the tax code to pass its taxable income, credits, deductions, and losses directly to its shareholders for federal tax purposes. The shareholders are then responsible for paying individual income taxes on this income. Unlike a C corporation, an S corporation is not subject to the corporate income tax (CIT). Here are some key features of S corporations:

• S corporations are ordinary business corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes.
• The term "S corporation" means a "small business corporation" which has made an election under § 1362(a) to be taxed as an S corporation.
• S corporations are generally corporations under the law of the state in which the entity is organized.
• S corporations are limited by the types of owners (shareholders) and cannot exceed 100 shareholders.
• S corporations are subject to the annual $800 minimum franchise tax.
• S corporations offer the limited liability protection of the corporate structure, meaning that an owner’s personal assets can’t be accessed by business creditors or legal claims against the company.
• S corporations must observe internal practices and formalities.

Overall, S corporations are a popular choice for small businesses because they offer the benefits of incorporation while being taxed as a partnership.