Thread: can i change from sole proprietorship to llc ?

with the same tax id number ?

I want to start sole proprietorship and then change it to llc as i go. is it possible with the same tax id ? and are there any complications ?

thank you

My first question is...

Why do you want to be a sole proprietor at first?

I don't see too many reasons to do this. If you want to be an LLC, you may as well do it that way from the beginning.

i want to start international service company, but in my state it cost 500$ to register llc, and as i understand i will have to pay this every year, where solo is not that expansive.

any suggestions ?

500 filing fees is expensive for an LLC, particularly on an annual basis. What state are you in?

I'll answer your origional question (sort of - through a true story) but first...

FUNDING FOR A NEW BIZ: Have you looked at your total start up costs? If you would struggle to come up with 500, I wonder if you have enough to fund the rest? I would strongly suggest you figure out how to come up with the 500 bucks. Sell some stuff on e-bay or something. There is a reason for the LLC... asset protection, etc.

To answer your origional question: I'll just tell you a story.

I had an LLC, and I needed to change to an S-Corp. I called the IRS. A representative told me that I could keep the same EIN number, I just needed to fill out a form. (I don't remember the number).

I told my accountant. She said, "I have never heard of that" but she looked it up and confirmed that I could fill out that form. We did and went about business as usual.

One year later, I got a call from the IRS. "You can't keep the same number when you switch from an LLC to an INC. We issued you a new number. Here it is." I said, "Yes you can. I was told about form xxx from an IRS rep and I filled it out."

They said. "no you can't."

It was pointless to fight it, as they had already issued a new number.

It caused a huge headache. I had employer payments getting filed under one number and forms getting filed under the other number. I had letters from the IRS stating that I had not payed my employer tax under one number, and letters stating that I had money sitting there, but no return on the other number. BLECH.

im in MA, it cost 500$ to register llc here, and i dont have any other expenses b/c it will be mainly services so, my customers will pay me.after the work is done for them. so i do want llc i guess, i just dont want to pay 500$, the main reason i need llc so i can get payments from them. so i was thinking to start with solo and then chagne as i go.

so this why i was looking for some help.

thank you

• will you be accepting payment by credit card? to do that, you will need some sort of a merchant account. (which will cost you money).
• Will you have a website? (money)
• phone? (money)
• how will people find out about you and your service? (money)

no. my main problem is that i dont want to pay that much to form llc, and i want to know if there are any benefits besides liability protection in llc ?

Hmm, I'm in this same boat I guess.

Where I should have taken the advice of starting with an LLC from the get go, it's too late, I've already established a sol prop awhile ago (before I knew more about the different structures) and I would jjust like to convert it to an LLC using the same TAX ID. Can this be done?