If you’re operating a business and want liability protection, you need to leave your DBA or sole proprietorship behind. A DBA or sole proprietorship leaves the owners totally liable for the business activities. An LLC or corporation provides more limitation of liability because you’ll be operating your business now as a separate entity. The separate entity should bear most of the liability. Below, you’ll find steps to transition from a sole proprietorship to an LLC or corporation.
STEPS TO CHANGING A DBA OR SOLE PROPRIETORSHIP TO AN LLC:
File the Articles of Organization with the state in which you want to form your LLC or corporation.
Dissolve the DBA or sole proprietorship with the state, city, or county where you originally registered the entity.
- Obtain a new EIN
You can receive a new Employer Identification Number (EIN) by visiting the IRS’ website. You can complete this task in a few minutes.
- Change everything
This is perhaps the most important part of transitioning from a DBA or sole proprietorship. To avoid exposing yourself to liability by someone later claiming you are still operating a sole proprietorship, you’ll need to change every account that was in the DBA’s name to the LLC or corporation. This includes things like bank accounts, vendor accounts, accounts payable, mailing addresses, and certainly every account registered with any government agency or department.
- Complete the transition
Your letterheads, websites, business cards, telephone listings, and other contact information will all need a facelift. Track down where the sole proprietorship was listed and replace it with LLC’s information.
You can signup below to have us form your new LLC or corporation for you. We’ll obtain the new EIN for you as well and you’ll be well on your way.