Separation of ownership and management may result in management practices which are detrimental to stockholders. More complicated to form. Must file forms with state government. Probably need a lawyer. To record taxes in an unprofitable period.
Dividends is the portion that is distributed to the stockholders.
To record the declaration of dividends 2. If the S Corp suffers a net loss, then the stockholders may deduct their share of the loss in their personal income tax returns.