Questions

I need to dissolve an owner's share in an IL S-Corp. Currently there are 2 owners. Would I still be able to keep the S-Corp with just one owner? 1 partner needs to dissolve their stake so the full company would be under my name. I live in CA and will be based there still. I am not sure how much business would still be in IL. Am I able to keep the S-Corp even though my IL based partner is no longer present and I don't live in IL? If I plan to do more work in CA, would I need to set up a foreign corporation in CA, or can it still operate as is? It is a national/global business. Is it better to just close the business and set up a new one with just myself as the owner?

Yes, you can have an S corporation with only one shareholder. Under U.S. tax rules, an S corporation is permitted to have anywhere from 1 to 100 shareholders. The shareholders must be natural persons, certain estates or trusts, and the shareholders must be U.S. citizens or tax residents for U.S. federal income tax purposes. If your legal entity is formed under the laws of Illinois, you are still permitted to operate the corporation even though your Illinois resident shareholder leaves the company. You're still required to file Illinois tax returns for the S corporation and remain compliant with all applicable laws. If you plan to operate the business exclusively from California, it might make sense to re-domicile the entity to California or another state, such as Delaware, or simply close the entity and form a new legal entity with you as the single shareholder.


Answered 5 years ago

Unlock Startups Unlimited

Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.

Already a member? Sign in

Copyright © 2024 Startups.com LLC. All rights reserved.