It is often an exciting moment in the growth of a business owner when they decide to formalize their business structure and transition from a sole proprietorship to a limited liability company. Converting and LLC Registration can seem daunting at first. But you will need it when your business expands, and you need a legal separation between your personal and your business affairs.
Operating as a sole proprietor can be an easy and affordable way to start a business. You can be successful even if you do not have a formal business entity for your company. However, being a sole proprietor can put your asset in danger and leave you vulnerable to other risks.
Therefore, switching from a sole proprietorship to LLC when your business is growing is a wise choice. Learn more as Global Multi Services explains how to convert from a Sole Proprietorship to a Limited Liability Company.
ASK A PROFESSIONAL FOR HELP
Establishing a Limited Liability Company comprises legal documentation, so you may want to get assistance from a legal practitioner. You can sign up for one online or hire an attorney. An online service will guide you through the entire process and are also less expensive. However, hiring an attorney will give you more specialized assistance but is very costly.
PICK A BUSINESS NAME
Pick a unique name to register your LLC and ensure it does not infringe on anyone’s trademark. Check if the name is available by contacting your state secretary of state office or their online database for registered business names. You can also ask for the help of a legal professional.
FILE ARTICLE OF INCORPORATION
The article of incorporation is a document that includes information about your Limited Liability Company. These include business name, address, registered agent, the names of members, and many more. These can generally be processed online through the website of your business filing agency state.
DESIGNATE A REGISTERED AGENT
Registered agents are the main point of contact between your limited liability company and the state and other legal authorities. Your registered agent must be in your business state and be available during business hours. You can choose to function as your agent or hire an attorney to take on this role.
OPEN A BANK ACCOUNT
You need to open a new business bank account for the limited liability company. Apply for a business bank account with your new LLC name. Even if you already have a business bank account for your sole proprietorship, you need to update your business bank information to reflect your new LLC status. These will help you separate your business and personal assets.
APPLY FOR LICENSE AND PERMIT
Regulations for business licenses vary from state to state. Therefore, update your business permits with the LLC name and change your business structure. You may need to reapply for some permits and licenses under your new business name. These depend on your state, local laws, and regulations. So be sure to check on your state requirements for confirmation.