Did Anyone Convert Their Sole Proprietorship To Llc?

Business By sugarjones Updated 24 Mar 2011 , 6:10am by sugarjones

sugarjones Posted 23 Mar 2011 , 9:13pm
post #1 of 9

Hi All-
Right now I'm a sole proprietor but my storefront opens in June-ish and I was thinking of converting to an LLC because I have investors who actually want to make money instead of getting paid back. I just don't think an actual "corp" is necessary (double tax, yuck!)
Has anyone gone through this super fun (sarcasm) process and would be willing to give me some advice?
I want to ask all of you before I ask my lawyer icon_smile.gif
Thanks so much!!

8 replies
MamaMia808 Posted 23 Mar 2011 , 9:23pm
post #2 of 9

Just for pure liability reasons it is a good idea. With a sole proprietorship you can be personally liable for your business. With a LLC your personal assets are protected.

platinumlady Posted 23 Mar 2011 , 9:34pm
post #3 of 9

Yes LLC is still a corporation...however, if you are worried about the double taxation look in to filing as s-corp with the IRS (it doesn't take away from the LLC) There are certain criteria for it So check with your attorney and tax preparer to see if that will be a good step for you & your business

Mfattore Posted 23 Mar 2011 , 9:41pm
post #4 of 9

An LLC is a limited liability company. It is independant of corporation status. See an accountant, they can best advise you. You will likely want to be an LLC and some type of Corp, probably s-corp as someone mentioned. None of these have to mean double taxation.

platinumlady Posted 23 Mar 2011 , 10:08pm
post #5 of 9
Quote:
Originally Posted by Mfattore

An LLC is a limited liability company. It is independant of corporation status. See an accountant, they can best advise you. You will likely want to be an LLC and some type of Corp, probably s-corp as someone mentioned. None of these have to mean double taxation.




filling as an s-corp is a way to avoid double taxation it's not a classification like sole proprietor it's how you file with the IRS ... same as a person might file married, single, head of household etc.

LLC however, is still a corporation you are not held liable for as much as you would be if you were just a corporation. The limited liability protects your business in the case of lose

The taxation deals with the IRS side so corporations can file either as a s-corporation or a r-corporation

But your CPA & attorney can advice you which way to go.

adventuregal Posted 23 Mar 2011 , 10:28pm
post #6 of 9

I'm going through this same thing! I'm currently thinking of switching to LLC because my business has hit a big growth and I think it would be better to plan ahead for any mishaps. I would call your local office and see what they say icon_smile.gif

costumeczar Posted 23 Mar 2011 , 10:52pm
post #7 of 9

You need to check with a tax attorney. If you have investors who you're paying back you're not really a sole proprietor anymore. Or at least I don't think you are. Which is why you should check with an attorney and not get advice from a cake website! icon_smile.gif

indydebi Posted 24 Mar 2011 , 12:10am
post #8 of 9

Yes, I did it. Had my attorney handled the whole thing. Painless. No difference in bookkeeping. he also did a name check, filed everything needed with the state, bing boom done. I had a CPA doing my taxes, who set me up with a "keeping the books" system that I turned in to them at the end of each week. Basically there was no bookkeeping difference either.

All in all, I saw no difference between sole and LLC on the operations side, but I sure slept better having the LLC!!! thumbs_up.gif

sugarjones Posted 24 Mar 2011 , 6:10am
post #9 of 9

Thanks so much for the input, everyone!! icon_smile.gif
I think the wording in my question implied I didn't know what the difference was or that I had no idea what I was doing (while I'm certainly no expert, I do have some experience).
Sorry about that (I'm sure you were waiting for me to ask a pricing question next?! hahaha)
I already have appointments set up for my accountant and lawyer, I just wanted to get opinions and see what storefront owners did when they made "the big move".
I've learned SO much from reading these forums over the years and I'm truly grateful for all of your knowledge, wisdom and amazing talents!!!
Thanks again icon_smile.gif

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