Only a natural person (who is also a U.S. citizen) or certain trust may hold S corporation stock. However, if the owner of an S corporation is sued, their stock can be seized, and if a majority of voting stock is seized, then a creditor can vote to liquidate the corporation, and subsequently seize corporate assets to satisfy his debt-claim. Using a charging order protected entity such as multi-member LLC or LP, would protect the stock from creditor attachment, but at the same time it would disqualify the corporation’s subchapter S tax status. However, if the LLC or LP was a disregarded entity (preferably, a multi-member disregarded entity, such as a DEMMLLC), then according to an IRS Private Letter Ruling, the S corporation would not lose its subchapter S election.