How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Loren Your Own Question
Loren, Attorney
Category: Business Law
Satisfied Customers: 28565
Experience:  30 years experience representing clients .
Type Your Business Law Question Here...
Loren is online now
A new question is answered every 9 seconds

I want to change ownership in my S California Corporation into

Resolved Question:

I want to change ownership in my S California Corporation into my wife's name. I am wanting to do more business with the State and County Departments. She works full-time in our business.
Submitted: 7 years ago.
Category: Business Law
Expert:  Loren replied 7 years ago.
You may be better off converting the S corp to an LLC. The entity provides the same protection from personal liability and income pass through for tax purposes. Additionally, LLC's are much more flexible in their structure and management because they are governed by an operating agreement. The operating agreement will spell out the rights and obligations of the members (like shareholders) and manager or managers (similar to the officers).

The conversion from S corp to LLC is usually accomplished with the filing of Articles with the state.

Hope this is helpful to you.
Customer: replied 7 years ago.
I cannot become a LLC, because I carry inventory (I sell supplies), my accountant says a LLC does not work in my case
Expert:  Loren replied 7 years ago.
Then the stock may be conveyed to your wife and the s corp election updated in her name. Make sure that this doesn't violate any credit agreements you may have with your banks or other secured lenders.
Customer: replied 7 years ago.
What filings with the state of california should I make. Is 51% Woman Ownership good enough for status of Woman Owned. What kind of documentation can I present to my customers (State & County) when I apply with them as Woman Owned.
Expert:  Loren replied 7 years ago.
It is not enough to be 51% female owned. It must also be managed and operated by the female owner. Otherwise, it is usually self certifying in the annual report and state contracts.

The following is from the Cal statutes:

(e) "Women business enterprise" means a business concern that meets all of the following

(1) The business is at least 51 percent owned by one or more women or, in the case of any
business whose stock is publicly held, at least 51 percent of the stock is owned by one or more
(2) A business whose management and daily operations are controlled by one or more
women who own the business.

Hope this helps. Good luck.
Customer: replied 7 years ago.
What filings do I make to the State of California to change status from my 100% ownership to her 51% ownership.
Expert:  Loren replied 7 years ago.
You are not selling the assets of the corporation so I don't believe you need to disclose the sale of the shares. You will have to amend the S corp election to the IRS to add your wife. Other than that, there is really not much else to do to convey the stock to your wife.
Loren and 7 other Business Law Specialists are ready to help you