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Converting Sole Proprietorship To LLC

I see this question asked often:

I’ve been operating as a sole proprietor. What business entity should I choose as a sole owner in Virginia doing [your type of business]?

Almost all lawyers will tell you the answer is an LLC.

But here are the answers to the questions that those business owners forgot to ask:

• Be sure to draft a bill of sale that transfers all of your sole proprietorship assets (cash, computer, etc) and liabilities (lease?…) into the new company.

• Don’t forget to file for a new license to do business in your county/city.

• Consult an accountant to determine whether to file the S-Corp election with the IRS. There are some benefits to doing that, but all is not peaches and cream there.

• Don’t forget the operating agreement. Even single-member LLCs should have one, and many banks won’t let you open an account without it.

You can pretty much file for a new LLC yourself at the VA State Corporation Commission website. But if you want help, call Argent Place Law. I can do it for you, and occasionally we offer a live workshop to guide you through the steps (and give you the documents you need) to form that company on your own. Contact us to find out when the next one will be offered.

Argent Place Law, PLLC serves entrepreneurs and and entrepreneurial organizations in matters of business and contract law, intellectual property law, and succession planning, including estate planning with wills and trusts. Argent Place: the silver lining where ideas are transformed into wealth.

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