S Corporation - Shareholder's Consent to Initial Election

A corporation elects to operate as an S corporation by filing Form 2553 (Election by a Small Business Corporation). Once made, the S election remains in effect until it is voluntarily or involuntarily terminated [IRC Sec. 1362(c)]. Changes in ownership of S corporation stock have no effect on the S election, so long as all of the stock is owned by individuals or other entities eligible to be S shareholders. To fill the Form 2553, the organization is required to get a consent from all their shareholders. This is a template which can be used to get consent from the shareholders for the initial election.