What Do They Mean By Non-routine Business Decisions?

QuestionDecisions not typically faced in the course of normal day-to-day operations. Examples might include the decision to discontinue a product line, the acceptance of a special customer order or the decision to make or buy a component part needed for a manufactured product. In making good non-routine business decisions, it is critical for management to identify and consider relevant revenues and costs and ignore information that should not impact the decision. The only relevant revenues and costs are future revenues and costs that vary among the decision alternatives, or in other words, future revenues and costs that differentiate the decision options. In addition to the quantitative analysis involved in business decision-making, qualitative factors must also be considered. This means that regardless of the financial impact, some choices are made to accomplish non-financial objectives. For example, a profitable business may be sold to a family relative at a price below its fair market value in order to accomplish some family objective.

How to qualify for S Corporation Status

Mtb8loFTo qualify for S corporation status, the corporation must meet the following requirements:

  • Be a domestic corporation
  • Have only allowable shareholders
    • May be individuals, certain trusts, and estates and
    • May not be partnerships, corporations or non-resident alien shareholders
  • Have no more than 100 shareholders
  • Have only one class of stock
  • Not be an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations).
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