SESK: Stuff Everyone Should Know · sesk.info/biz-s-corp-one-class-stock
How many classes of stock may an S corporation have?
Only one class, though voting rights may differ.
- Only one ✔
- Two, common and preferred
- Any number
Why: An S corporation must have only one class of stock. Shares can differ in voting rights, but all must have identical rights to distributions and liquidation proceeds.
Huh, didn't know that: This is why S corporations can't give investors "preferred" shares that get paid first.
Why did the S corp's stock skip the fancy reunion? It only ever had one class.
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References
Answer: Only one. An S corporation must have only one class of stock. Shares can differ in voting rights, but all must have identical rights to distributions and liquidation proceeds.
- IRS: Instructions for Form 2553 www.irs.gov/instructions/i2553
It has only one class of stock (disregarding differences in voting rights).
Checked 2026-10-11.
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