Comments on: How to Incorporate Your Sole Proprietorship

By: Mark

Mark — Thu, 15 Dec 2011 18:10:12 +0000

Hello, great website, I wish I found your blog before I started my sole prop. I now want to convert to a corporation. I was wondering how much should my potential partner buy from me? I have no idea about the valuation of my small business but it earns a modest income of around $500/mo. Do I register first as corporation then sell shares to my potential partner?

By: martha monkman

martha monkman — Sat, 09 Oct 2010 21:36:00 +0000

I have the sole prop in QB’s; do I need to start a new company file when I convert to a sole owner LLC?

By: martha monkman

martha monkman — Sat, 09 Oct 2010 21:36:00 +0000

I have the sole prop in QB’s; do I need to start a new company file when I convert to a sole owner LLC?

By: shyne

shyne — Sun, 20 Jun 2010 08:38:51 +0000

i have three different businesses and me and my cousin is planning to incorporate them, would that be possible? would it need changing the names of the current businesses if they are incorporated?

By: shyne

shyne — Sun, 20 Jun 2010 08:38:00 +0000

i have three different businesses and me and my cousin is planning to incorporate them, would that be possible? would it need changing the names of the current businesses if they are incorporated?

By: Ella T P

Ella T P — Mon, 08 Mar 2010 17:26:33 +0000

What happens to the sole prop credit card balances and loans when it incorporates? Does the new corporation now shoulder the whole loan from the sole prop? Or, if the corporation now pays for these loans, would the sole prop owe the corporation for said payments?

By: Ella T P

Ella T P — Mon, 08 Mar 2010 17:26:00 +0000

By: Ryan Roberts

Ryan Roberts — Thu, 31 Dec 2009 08:56:35 +0000

@ Michelle – I assume you mean county DBA (as states like Texas also have a state-DBA). I would think this is possible but I would check with the applicable county clerk.

@ Tina – Yes, you can transfer those over.

@ Jeff – No, you would just transfer the assets/liabilities over to the new entity. Not sure on the TIN.

By: Ryan Roberts

Ryan Roberts — Thu, 31 Dec 2009 08:56:00 +0000

@ Michelle – I assume you mean county DBA (as states like Texas also have a state-DBA). I would think this is possible but I would check with the applicable county clerk.

@ Tina – Yes, you can transfer those over.

@ Jeff – No, you would just transfer the assets/liabilities over to the new entity. Not sure on the TIN.

By: Jeff Thompson

Jeff Thompson — Wed, 23 Dec 2009 20:48:46 +0000

I open a business 6 yrs ago as a sole proprietor with the county but never used it. Things are looking pretty good now and im looking to incorporate as a sole proprietor. Do i have to close the other business with the county before incorporating with the state? i also received an tin number 6 yrs ago. Do i have to change the entity with the irs or get an new tin?

By: Jeff Thompson

Jeff Thompson — Wed, 23 Dec 2009 20:48:00 +0000

By: Tina

Tina — Tue, 03 Nov 2009 08:46:21 +0000

What happens to the receivables and liabilities of the sole proprietorship when it converts to a single member LLC? Can I continue operating as is and have those transfer over?

By: Tina

Tina — Tue, 03 Nov 2009 08:46:00 +0000

What happens to the receivables and liabilities of the sole proprietorship when it converts to a single member LLC? Can I continue operating as is and have those transfer over?

By: Michelle

Michelle — Tue, 13 Oct 2009 15:59:27 +0000

My husband and I established a Texas corporation a few years ago and never actually did any business under it. Recently he took out a dba untder his personal name. Is it posible to transfer this dba to an allready established corporation ??

By: Michelle

Michelle — Tue, 13 Oct 2009 15:59:00 +0000

By: John Novotny

John Novotny — Mon, 22 Jun 2009 10:54:33 +0000

Arthur:

When you say that you can use the existing EIN when the new company is an outgrowth of the old, do you mean that you can take the EIN of a proprietorship, and legacy or transfer it to a new corporation? If so, is there an IRS form that you know of to do such a transfer?

By: John Novotny

John Novotny — Mon, 22 Jun 2009 10:54:00 +0000

Arthur:

By: Arthur Fishman

Arthur Fishman — Tue, 16 Jun 2009 19:57:37 +0000

You can continue to use a existing Employer Identification Number, if the new company is an ougrowth of the original. You transfered the assets and liabilities to the Corp.

As to starting as a Corp.
I liken that advice telling your infant to run out of the mothers womb.

The prudent advice is to start as a Proprietorship or partnership, see how your BUSINESS PLAN is working and then discuss with your accountant and lawyer hether you are ready for the next step.

Closing a Proprietorship or a Partnership is much easier than closing a Corp.
Also the recordkeeping for a Corp and the record keeping for a proprietorship is much more exacting.

So, I would suggest start your idea, have a Accountant help you WRITE A BUSINESS PLAN, THEN work at your idea for 12 to 24 months, and if the Business is moving successfully, then Incorp.

By: Arthur Fishman

Arthur Fishman — Tue, 16 Jun 2009 19:57:00 +0000

You can continue to use a existing Employer Identification Number, if the new company is an ougrowth of the original. You transfered the assets and liabilities to the Corp.

As to starting as a Corp.
I liken that advice telling your infant to run out of the mothers womb.

The prudent advice is to start as a Proprietorship or partnership, see how your BUSINESS PLAN is working and then discuss with your accountant and lawyer hether you are ready for the next step.

Closing a Proprietorship or a Partnership is much easier than closing a Corp.
Also the recordkeeping for a Corp and the record keeping for a proprietorship is much more exacting.

So, I would suggest start your idea, have a Accountant help you WRITE A BUSINESS PLAN, THEN work at your idea for 12 to 24 months, and if the Business is moving successfully, then Incorp.

By: Ryan Roberts

Ryan Roberts — Fri, 01 May 2009 11:39:54 +0000

Learetha-

I'm not sure. I think a CPA/accountant can answer that. I'd contact the IRS–they have a pretty helpful site.