Personal-Service Corporation

AAA

DEFINITION of 'Personal-Service Corporation'

A corporation that is created for the purpose of providing personal services to individuals or groups. To be considered a personal-service corporation by the IRS, the employee-owners must perform at least 20% of the personal services themselves. The employee-owners must also own at least 10% of the outstanding stock of the personal-service corporation on the last day of the initial one-year testing period.

INVESTOPEDIA EXPLAINS 'Personal-Service Corporation'

If you function as the owner-employee of a personal-service corporation and your primary business is related to creative/fine arts or photography, any current expenses you incur pursuant to creative work are deductible for the corporation. However, either you or your family members must hold all or nearly all of the corporation's outstanding stock. This rule does not apply to other types of personal-service corporations.

RELATED TERMS
  1. Outstanding Shares

    A company's stock currently held by all its shareholders, including ...
  2. Corporation

    A legal entity that is separate and distinct from its owners. ...
  3. Personal-Service Activity

    Any business enterprise with the primary purpose of providing ...
  4. Protected Cell Company (PCC)

    A corporate structure in which a single legal entity is comprised ...
  5. Registered Holder

    Shareholders who hold their shares directly with a company.
  6. Duty Of Loyalty

    A director's responsibility to act at all times in the best interests ...
Related Articles
  1. Six Steps To A Better Business Budget
    Entrepreneurship

    Six Steps To A Better Business Budget

  2. I am starting a limited liability company ...
    Entrepreneurship

    I am starting a limited liability company ...

  3. Tax Credit For Plan Expenses Incurred ...
    Entrepreneurship

    Tax Credit For Plan Expenses Incurred ...

  4. Start Your Own Small Business
    Entrepreneurship

    Start Your Own Small Business

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center