Convert A LLC From A Sole Proprietor To A Partnership.*

[gman3586]

I currently have sole proprietor LLC that I started last year. I would like to add a partner but I'm not 100% on what steps I need to take to do this properly. I pretty sure I need to file for a new EIN number from the IRS but not sure what else.*

Thanks in advance for the help.*
Ken

[torka]

The main thing I'd advise is to talk to a lawyer (and, possibly also a tax accountant).

Any time you bring somebody else into your business, you're going to want to make sure you have a written agreement ("handshake deals" are definitely not sufficient) that spells out each party's responsibilities and the scope of their authority. It should also address how to handle things should one partner decide to exit the partnership, and what happens if one of you shuffles off this mortal coil prematurely. For instance: can you leave your share to whoever you want in your will, or does your business partner get a say in who his new partner(s) will be?

Any decent lawyer will ask a bunch of questions to make sure you and your partner have considered all the contingencies and that they're all addressed in your partnership agreement.

You may also want to have a chat with a tax accountant. Going from a sole proprietorship to a partnership will potentially have some tax implications for you, so you'll want to be sure you're prepared and that your business has been organized in such a way as to minimize the impact.

Good luck! Hope this helps.

--Torka

[gman3586]

Thanks for the information. We are meeting with a CPA next week.

[denise1000]

the only thing you should do is meet with a tax accountant ? attorney (LLM)
speaking from experience it will save you the diaster if it strikes...
good luck

[tdmart]

Initially when I formed my LLC it was a sole proprietor setup. I added my sons to make it a Partnership LLC. I had my accountant do all the paperwork for me and would highly advise doing it that way. I needed to stay focused on doing what we do here and that kind of work is what I have him for. My accountant is good and I have been using him for 13 years now. I absolutely would not be without him for my business.