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.