Legal Question in Business Law in Massachusetts

Re: S Corporation -reformation

If you have changed shareholders of the Sub-S by adding new shareholders, you have to file a consent in the alloted time to keep the Sub-S status.

You can amend your Articles of Incorporation and by-laws and file the appropriate change in business purpose. You can even change the name, however, the cost of the Amendments will be from $100 plus depending upon what changes you need to make. The cost savings in filing fees will be $200 or less. The cost of creating a new corporation as opposed to having some one make the changes for you, should be a little less than forming a new corporation assuming the changes needed are pretty standard.

The most important aspect of the deal is that new investors will not have the benefit of writing-off their losses if the company goes under as ordinary income, since they will not qualify under the federal statutes for same.

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