Which type of corporation is limited to a maximum of 100 shareholders?

The option identifying the type of corporation limited to a maximum of 100 shareholders is indeed the S corporation. An S corporation is a special type of corporation that meets specific Internal Revenue Code requirements, allowing it to pass income directly to its shareholders, thereby avoiding double taxation on the corporate income.

One crucial stipulation of S corporations is the limitation on the number of shareholders; they cannot exceed 100, which helps maintain the structure and simplify tax reporting. Additionally, all shareholders of an S corporation must be individuals (with certain exceptions for qualified trusts, estates, and specific types of tax-exempt organizations), further distinguishing it from other corporation types.

In comparison, C corporations do not have a restriction on the number of shareholders, which allows for potentially unlimited shareholders and is often used by larger companies. Limited liability companies have their own structural rules and are not classified as corporations, so they don't face the same shareholder limits. Public corporations often refer to entities traded on public stock exchanges and can have thousands of shareholders, far exceeding the 100-shareholder limitation.