Most people think that Subchapter S Corporations tend to be larger small businesses. However data from a study of small business tax compliance led by Donald DeLuca of IBM Global Services show that the vast majority of Subchapter S Corporations are micro-businesses – companies with fewer than 10 employees.
As the figure below indicates, 77 percent of S corporations have five or fewer empoyees and 87 percent have fewer than 10. In fact, counter to the common notion that virtually all self-employed people without employees operate their businesses as sole proprietorships, the data show that 44 percent of Subchapter S corporations have zero employees.
