If the entity changes, ie, S corp, the file needs to be started as that type when the entity changes.
For example, I used to own RI Bookkeeping. I was a sole proprietor (schedule C). On July 1 (1999 - OMG!), I incorporated and became an S-corp. I had to start a whole new file 7/1-12/31/1999 that business was an S-corp. Jan-June 30, 1999 was filed as a sole proprietorship. I had two tax business returns that year due my incorporating my business. Different chart of accts. Too.
