(NOTE: I have been terrible about writing posts this year; I am finally back at a point of being able to blog again, so you’ll see posts more often from me. And if this post is any indication, I have my flair back that so many people liked, of writing with humor and going on […]
Scenario: an existing LLC, taxed as a sole proprietorship or a partnership, has an employer ID number. If the LLC later decides to be taxed as a corporation, does it need a new EIN? This one is straightforward to answer. The answer is, no.
In simple terms, a sole proprietorship refers to a business which is not incorporated and which has only one owner.
When a sole proprietor has an employer identification number (EIN), it would seem to be common sense that the proprietor would put that EIN on the Schedule C for the proprietorship. Not so fast — especially of the sole proprietorship is a single-member LLC taxed as a sole proprietorship.
Question: I am a co-owner in a partnership. The partnership has an EIN. We have now decided to form an LLC but will continue to be taxed as a partnership. Do we need a new EIN for the LLC? Answer: No, you can keep your existing EIN.
This series on choosing a business entity started last June and covered 10 parts. Here’s a listing, with links, of all the parts in this series.
There’s no magical checklist for deciding on a business entity. But here are a few considerations.
An LLC is a “limited liability company.” Note the “C” stands for “company” and not “corporation.” LLCs are legal entities formed under state law.
S-corporation is a tax term that refers to a corporation or an LLC that elects to be taxed under the rules of Subchapter S of the Internal Revenue Code.
LLC stands for Limited Liability Company. The tax treatment of LLC varies.