Legal Question in Business Law in California

Re: Convert from C Corporation to S Corporation

No, you are not required to alter your Articles if they are silent on the subject. It is a common misconception that there is something inherently different between an 'S' and a 'C' corporation, as there is between, say, a private corporation and a municipal corporation, or between a for-profit and a nonprofit.

The tags 'C' and 'S' have only to to with the form of income taxation the corporation has elected.

This does not mean there are no limitations on conversion, however, but they are imposed by the IRS, not the California Sec. of State.

You should consult a tax advisor to determine whether your S corporation is qualified to change its election. Also, even if it is qualified, it may not be advantageous. Further, you need the consent of all shareholders.