The advantages of a federal tax status
S Corporations are formed under the laws of a particular state and they are subject to certain laws and regulations of the state. In a managed S Corporation, a judgment against a business should not affect an owner’s personal assets, like a home, car or personal savings. In an S Corporation, shareholders own a corporation and appoint a board of directors that will make decisions and oversee various policies.
S corporations are "considered by law to be a unique entity, separate and apart from those who own it”, which limits the liability for which the owner or shareholders are responsible.