Does anyone know how to convert Chapter C Corp to a Subchapter S Corp?

Question

I opened up a corporation last year that is chapter c, the business was inactive and there was no activity so I was not able to convert it to subchapter s. But now, I'm going to start my business, I don't want to be charge double for the tax as a corporation and as an individual. What can I do to change this to a subchapter s, should I call the state department? I have no other stockholders, its just me. Any advice would be appreciated. Thanks in advance.

Answer 1

It is not a very difficult process at all. NO NEED FOR SHAREHOLDER MEETING OR VOTE.

A corporation or other entity eligible to elect to be treated as

a corporation must use Form 2553 to make an election under section 1362(a) to be an S corporation.

Complete and file Form 2553:

• No more than two months and 15 days after the beginning of the tax year the election is to take effect, or

• At any time during the tax year preceding the tax year it is to take effect.

Here is the link for the form to fill out:

http://www.irs.gov/pub/irs-pdf/f2553.pdf

if you have a problem filling it out, you may email me.

Good Luck!

Answer 2

You need to have a unanimous vote of all the shareholders, and do all the conversion forms with the IRS.

A corporation still needs to call and hold a special shareholder meeting and hold a vote, with all the shareholders, even if it is only 1 person.

I think that you keep thinking of this as you, but this corporation is a seperate entity, governed by the business corporations act. There must be a shareholder meeting and there must be a vote and the all the shares must vote for S-Corp status, and to do all that is necessary to maintain S-Corp status with the IRS.