subject: How To Transition From A Sole Proprietorship To A Separate Legal Entity [print this page] Have you started your business with this approach for the benefit of yourself and now you've made an important step for the formation of an independent legal entity. This is a huge step. The key is to complete the transition so that your business will benefit from the advantages that you can get through the formation of an independent legal entity.
Over the years, we have seen many errors in this transitional phase, and many times when someone is still working a single institution, along with the new company without knowing about it. We wanted to clarify the steps that must be completed to make the transition.
Here are the steps:
Form a separate legal entity (limited liability company or a company). ASC can help you to do (we train company and limited liability companies in all 50 states).
Get a new tax ID number. Even if you have a tax identification number as a sole proprietorship need to be a new one!
Open a new bank account on behalf of the entity. Yes, even if you already have an account and you go from "marketing solutions" to "Marketing Solutions, Inc." is the name of a new and independent legal entity, and you need a new bank account. Yes, new controls too!
Db link (doing business) and the new entity. When I filed dB in the province of local private you are the applicant. This is what makes the companies on your behalf. Now you need to "reconnect" db to the new legal entity. This means that you need to resolve the name of DBA and re-linked you (same day) DBA name the new entity. This means that the new entity is the applicant. This is up to the new entity. Now, for each of the tax and liability issues for any company in the db from this point is the name of the new entity.
To obtain a commercial license in the name of the new entity. Yes, again. Generally, can not convert a license to operate the sole owner of the name the new company. The reason? This is a separate legal entity.
Access to credit card companies on behalf of the new entity. Stop using credit cards, identity cards to finance your business. Request the Bank when the new entity must be in business before they are advised to request credit card companies.
Update all your sources of income with a tax identification number of the new the new entity. You goal is to avoid receiving 1099s of unnecessary (which means that you want money, not just for you individually more than that) to cover the costs of membership or expulsion by the end of next year. Make sure to update all members of the entity with the new information.
Reload this contract in the name of the new entity.
Update your vendor with the name of the new entity and information.
Get new business cards. Do not be cheap, even if the only difference from the name of the company is "limited liability company."
Implementation of a new plan for the accounts in the name of the new entity.
Reload this merchant account provider entity with new information. You may have to complete new forms.
Update your information provider new insurance entity.
Monitor and update all matters relating to the State on behalf of the new entity.
Missed check with your attorney or CPA at each stage.
This is a good list to get you started. Have not finished the biggest mistake we see your name DBA update the name of the new entity, and the use of a new bank account. The aim was to track the sole owner as soon as possible. If you add a new business in the future, you can add a name with a new DBA entity as the applicant. The key is to be aware of this type of asset. Safe assets such as gold, investments should be held by a legal entity separate from the process of your business. The property should be in a separate legal entity as well. If you have multiple properties, each with a lot of equity, it may be reasonable to split them into separate legal entities.
Currently, sole proprietorship, and looking to make the transition to a separate legal entity? Call us at 1-888-627-7007 National Congress Party, and we will take you through the whole process, and tools to deal more, including webinars, and checklists ... To make this process transparent to you!
