Question

Which statement is incorrect with respect to an S shareholder's consent?

a. Both husband and wife must consent if one owns the stock as community property.
b. A consent must be in writing.
c. An S election requires a consent from all of the S corporation's shareholders.
d. None of these statements are incorrect.

Answer 1

All three statements with respect to an S shareholder's consent are correct.

Step-by-step explanation:

In an S corporation, the consent of the shareholders is required for certain actions. Let's examine each statement to determine which one is incorrect:

1. a. Both husband and wife must consent if one owns the stock as community property: This statement is correct. If one spouse owns the S corporation stock as community property, both spouses must consent.
2. b. A consent must be in writing: This statement is correct. A consent in the S corporation must be in writing.
3. c. An S election requires a consent from all of the S corporation's shareholders: This statement is correct. For an S corporation election, consent must be obtained from all shareholders.
4. d. None of these statements are incorrect: This statement is incorrect. All three statements are correct. Therefore, the correct answer is D, None of these statements are incorrect.