Unlock the Power of Growth: Seamlessly Changing from an S Corp to a C Corp**

Are you ready to elevate your business to new heights? Consider changing from an S Corp to a C Corp to gain access to a wider range of financial and strategic options that can fuel your growth.

Benefits of Changing from an S Corp to a C Corp

• Enhanced fundraising opportunities: C Corps can issue multiple classes of stock, making it easier to raise capital from a broader pool of investors.
• Unlimited shareholders: C Corps can have an unlimited number of shareholders, providing greater flexibility for ownership and investment.
• Tax efficiency at scale: While S Corps have a tax advantage at lower income levels, C Corps can become more tax-efficient as your business scales.

Considerations for Changing from an S Corp to a C Corp

• Tax implications: The change from an S Corp to a C Corp triggers a deemed sale of assets, which may result in capital gains tax.
• Legal and administrative costs: The conversion from an S Corp to a C Corp involves legal and administrative costs, such as filing fees and attorney fees.
• Different tax treatment: C Corps are subject to double taxation, which means corporate income is taxed at the corporate level and again as dividends to shareholders.

Success Stories of Businesses that Changed from S Corps to C Corps

• Example 1: A technology start-up changed from an S Corp to a C Corp to access venture capital funding, which enabled them to accelerate their product development and market expansion.
• Example 2: A real estate investment company converted from an S Corp to a C Corp to take advantage of tax deferral on capital gains and distribute profits more efficiently to its shareholders.
• Example 3: A manufacturing company switched from an S Corp to a C Corp to establish a stock option plan for its employees, attracting and retaining top talent.

FAQs About Changing from an S Corp to a C Corp

• What is the process for changing from an S Corp to a C Corp?
  • File Form 2553 with the IRS to revoke your S Corp election.
  • File articles of incorporation and bylaws for your new C Corp.
  • Obtain an Employee Identification Number (EIN) for your C Corp.
• When should you consider changing from an S Corp to a C Corp?
  • When you need to raise significant capital.
  • When you want to have more than 100 shareholders.
  • When you anticipate significant growth and profitability.

By carefully considering the benefits and implications of changing from an S Corp to a C Corp, you can unlock new opportunities for growth and success for your business. Consult with a qualified tax advisor or attorney to determine if this transition is the right move for you.