Which of the following business structures allows profits to be passed through to owners without corporate tax?

The S Corporation is a specific type of business structure that allows for "pass-through" taxation, meaning that the income of the business is not taxed at the corporate level. Instead, profits are passed directly to the owners (shareholders) and reported on their individual tax returns. This can provide significant tax advantages by avoiding the double taxation that typically applies to traditional C Corporations, where the corporation pays taxes on its profits and then shareholders pay taxes again on dividends.

In an S Corporation, the tax obligations fall on the owners, allowing them to benefit directly from the profits of the business without incurring corporate tax. This structure is particularly attractive to small business owners who want limited liability protection while minimizing tax liability.

While other business structures like Limited Liability Companies (LLCs) and General Partnerships also benefit from pass-through taxation, the S Corporation is distinctive in its legal formation and the specific eligibility requirements it must meet to maintain its status. C Corporations, on the other hand, are subject to corporate taxation and do not allow for profits to pass through to the owners without an associated tax burden.