Question

which is a disadvantage of s corporations?
they have high taxation rates
they are subject to double - taxation
there are very strict qualification requirements for becoming an s corporation
there is a limited number of allowed s corporations

Explanation:

S - corporations are pass - through entities, so they do not have high taxation rates (as the income is taxed at the shareholder level) and are not subject to double - taxation (unlike C - corporations). There is no limited number of allowed S - corporations. However, to qualify as an S - corporation, there are strict requirements such as having only one class of stock, a limited number of shareholders (100 or less), and shareholders must be individuals (not certain types of entities in most cases).

Answer:

There are very strict qualification requirements for becoming an S corporation.