convert sole proprietorship to llc

How do I convert a sole proprietorship with an ein # to a LLC with the same ein #?

Answer

When a sole proprietorship changes to a corporate or partnership form (such as an LLC), you need to apply for a new EIN.

Assuming that the new LLC will continue to have only you as a member, it will be a single member LLC. As an SMLLC, if you have employees, you will need to obtain an EIN. If your company has no employees, then the IRS will let you use your social security number or you can use an EIN.


Question about converting a partnership to an LLC:

My husband and I opened a business as a partnership with one EIN. We want to protect our personal assets, so we're considering becoming an LLC. We will not add any partners or change our business structure.

To do so,
1) Do we need an new EIN?
2) What forms do we need to complete for the LLC designation?

Answer

If the partnership is relatively new, form a new LLC and operate the business under that new entity.

If you have significant assets in the partnership, there might be tax consequences to making the change and you should see an accountant and/or attorney.

You'll need a new EIN for your LLC. Remember, you are creating a new legal entity by forming an LLC (as opposed to a partnership, which is just a combination of partners, but no entity that is wholly separate from the partners is formed).

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