If want to form a corporation and elect to be taxed as an S-corp, does it matter if I choose a close corp or general stock when filing my articles?

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If want to form a corporation and elect to be taxed as an S-corp, does it matter if I choose a close corp or general stock when filing my articles?

I eventually want to grow my business to be public traded. What are the ramifications of each?

Asked on June 25, 2013 under Business Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

If you want your business entity to operate as an S Corporation for tax purposes you need to set forth in the initial articles of incorporation that it will be an S corporation Iclose corporation) and file your state and federal tax returns as such type of an entity. To become a publically traded C corporation you then need to change the corporation's status to a C corporation.


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