Changing company type

First I would suggest you talk with a tax professional and determine if this is the best option. Second you need to file articles of Incorporation, get licenses, permits, TIN, EIN and other stuff specific to your industry and location. Third you need to file From 351 for the transfer of any assets or liabilities from the SP to Inc. Forth set up a new company file. It is a new company so you start at zero.

Marc Barnes

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Everything is NOT the same, and if you think that, you haven't paid attention to what everyone is telling you.

The new company does not have an owner. The new company has shareholders. Any employees for the old company are now working for a new company. This resets Unemployment and worker comp and SS for everyone. All new paperwork.

Which assets transferred to the corporation is an important point. The owner of the old company may have contributed the car to the corporation. This means it is not owned by the owner. This means new title, new registration, new insurance.

The bank info is NOT the same. The bank will require new paperwork.

Did the sole proprietorship sell the receivables and the payables? What about customer deposits? Who is responsible to pay down loans? Who owns the desks, computers? Who is on the office space lease?

If there was a retirement plan or health plan, those are done - gone with the old company.

The tax filings are not the same. The employer tax filings are not the same.

The old owner now is an employee; new hire paperwork! New hire paperwork for everyone!

Get good advice, make a list of tasks. Perhaps you don't want to operate under the new company name until Jan 1? Otherwise, it's 2 x W2 for employees, 2 x 1099-misc for vendors, 2 x all paperwork.

The others gave you some good advice. I would add however, first when considering a business structure such as a corporation taxes are only one aspect. The area of liability protection is a major plus for formal business structures. Even if it may not offer a lot of tax benefits the protection it offers may be worth it alone.

A sole prop and a corporation very little will be the same. It is its own living breathing entity, where as a sole prop and yourself are one and the same. It must be clearly defined and separate from you as an person.

First form the entity (www.mycorporation.com, can help you with this) , obtain an EIN number from the IRS (this can be done online easily, make sure you have the entity filed and approved by the state first to avoid the possibility of obtaining an EIN for a name the state rejects) You will need to establish a corporate bank account NOT the same as your sole prop account (which is essentially you) Any applicable business licenses will need to be established in the corporations name. I would suggest talking to your tax advisor to file the 351 Copper Canyon Tax pointed out.

Make sure you maintain a corporate record book; bylaws, meeting , minutes and issue stock certificates to yourself or any other owners of the company. If you have questions please consult a professional in this area. It sounds complicated but it is not ever difficult to do. There are some great software packages that will help you.