What is the procedure to transfer a percentage of shares of a Pennsylvania S corp to my two children? Scenario as follows:

Owner - 100% of shares (100 shares total)
Transfer 25% of company to child 1
Transfer 25% of company to child 2
I will own 50% of the company

Who do I need to talk to so I can transfer 50% of the company? Does my accountant need to do this? I'm willing to just gift these shares to them. Is there a form that needs to be supplied to the state or does the K-1 for our tax returns now reflect this?

The articles of incorporation state the following:
250,000 shares of common stock - $0.10 par value.
1,000 share of preferred stock - $100 par value.
5 1/2% dividends payable out of the profits of the corp when earned, non-cumulative, and non voting.

I'm not able to edit my original post and wanted to add....

The articles of incorporation state the following:
250,000 shares of common stock - $0.10 par value.
1,000 share of preferred stock - $100 par value.
5 1/2% dividends payable out of the profits of the corp when earned, non-cumulative, and non voting.

Who do I need to talk to so I can transfer 50% of the company? ====>> many S-Corps have agreements in place that may limit to whom a shareholder may sell her shares. If you transfer stock to a person or entity that is prohibited from owning S corp stock, the business will automatically lose its tax status. You need to determine if the S-Corp has a valid shareholders? agreement. A common way for S-Corps to restrict who can purchase their shares is through a shareholders? agreement. This contract is generally created when the S-Corp forms and is signed by the current shareholders. This agreement will identify to whom you can and cannot sell your shares. Also you need to determine if the stock purchaser is permitted to own S-Corp stock. If there is no shareholders? agreement in place, you will need to check to ensure the buyer can own S-Corp stock. Only individuals who are citizens or resident aliens, certain trusts and estates may own S-Corp stock. Partnerships and corporations may not own S-Corp stock.

Does my accountant need to do this?======>>as mentioned above.s tock is transferable on the books of the corp in such manner and under such regulations as may be provided in the articles of incorporation or in the by-laws. For example, the articles of incorporation may provide that in case a stockholder desires to sell, transfer or otherwise dispose of his shares of stock, the corporation or some stockholder or stockholders thereof shall have a preferential right to purchase such shares. I suggest you read the articles and bylaws carefully to determine the rights and obligations regarding a transfer of stock.

I'm willing to just gift these shares to them. Is there a form that needs to be supplied to the state or does the K-1 for our tax returns now reflect this?==========> Both parties should sign the stock transfer agreement. If the S corp issues paper stock certificates, the current owner should sign them over to the new owner. If the shares are being sold, the buyer should transfer payment to the seller.ALSOyou need to record the exchange in the S corp?s stock ledger. )The secretary of the board of directors should make note of the date of the transfer and the sales price, and record the contact information and Social Security number of the new owner.)A stock ledger is the corp?s record of its shareholders? personal information and number of shares each stockholder controls; One of the requirements for Subchapter S status is that all shareholders consent to the election in writing. The consent form is a notarized declaration that the shareholder agrees that the company should be taxed under Subchapter S. you need to have the new shareholder sign the consent form, and file it with the corporation's records.So You can certainly transfer the shares. Depending upon the value of the shares, there may or may not be a gift tax.
so you neeed to refer to the corp's bylaws or separate buy-sell agreement between shareholders. Most well-run S corps will restrict stock transfers to preserve the corporation's Subchapter S election , as aid previously, from revocation through the accidental transfer of stock to ineligible parties. The corp may require approval of third parties to whom you wish to transfer the stock or may prohibit transfer altogether and require you to sell your stock back to the corporation. The specific stock transfer procedures that are in effect for the S corp trump any general procedures to make the transfer.