An S corporation has the liability protection of corporations along with several tax benefits. The owners of S corporations can use the cash method of accounting if they don't have inventory. They can have up to 75 shareholders, which makes it possible to attract more capital. S corporations must file articles of incorporation like all corporations and hold directors and shareholder meetings. They also must allow shareholders to vote on major decisions. S corporations can only issue common stock, which could impact the corporation's ability to raise capital.