Converting from a Sole Proprietorship to a Limited Liability Company

Can You Do It? How Easy Is It? What Do You Have to Do?

When you first went into business for yourself, you may have been wearing just about every hat, handling everything yourself. At the time, it made sense to run the business as a sole proprietorship. But your business has grown into a thriving enterprise, and you may even have investors or individuals that you want to bring into the business. You’ve done your homework and believe that a limited liability company will meet all your needs. Can you convert the sole proprietorship to an LLC? If so, is it a complicated process? What steps will you need to take to formally change your business structure?

Can You Convert a Sole Proprietorship to a Limited Liability Company?

The simple answer is yes. There’s no legal reason why you can’t change your business form from a sole proprietorship to a limited liability company (or even a corporation, for that matter). When you went into business as a sole proprietor, you likely filed minimal documents with the state or local government. You may have obtained a business license (if necessary) and you may have filed some form of certificate of assumed name, if you operated the business in any name other than your own.

Accordingly, if you’re currently operating as a sole proprietor, but now want to give yourself and your company the added benefits of an LLC, you’ll simply form the LLC exactly the same way you would have, had you not conducted any prior business. Though the process is not overly complex, you’ll find it much easier if you work directly with an experienced attorney. A knowledgeable lawyer will help you:

• Select and register a business name that won’t cause conflict with other existing enterprises, and will help identify your goods and/or services
• Ensure that the name you select complies with state business formation laws
• Complete any filings required by the state to set up your business
• Implement an operating agreement that sets forth the rights and responsibilities of all members of the LLC, as well as the management and operation of the business
• Ensure that you obtain all necessary licenses and permits, and that you are registered with all required revenue agencies

Contact MCIS Law

At MCIS Law, PLLC, in Stafford, we provide comprehensive counsel to businesses in southeast Texas. For a confidential consultation with an experienced and knowledgeable lawyer, email us or call our office at (346) 297-0121. We accept all major credit cards.