Propertorship to LLC
From propertorship to LLC
In Texas, there is no direct way to convert your company. What you can do is open an LLC, sell the assets of your sole proprietorship to the new company, and subsequently relinquish your DBA. This way, you will now have a structured company that protects your personal assets, provides more stability to your company and family.
HOW IS THE PROCESS?
Secretary of State of TX
a. Reserve the chosen name; it must be a name not currently in use in the state.
b. Afterward, incorporation fees must be paid.
c. Choose a representative.
IRS
You should open:
a. Employer Identification Number (EIN)
b. Tax ID #
Bank account
a. You must open a bank account in the name of your company.
b. DO NOT mix personal and business accounts.
Articles of Organization and Operating
Agreement will specify:
a. How the company is organized.
b. How shares operate.
c. The participation of the members.
d. What to do in case of inheritance, sale, dissolution
Selling the assets
a. Your sole proprietor should sell the business assets to the LLC so that they are now held there and have no connection to your personal assets
Accounting and Contracts
a. If you have contracts with suppliers, update them with the new name. Maintain separate accounting for the new company.
b. If you have employees, use the W9 form, and link them to the new company. Update contracts and accounting accordingly.
Keep in Touch
13005 Greenville Avenue,
California, TX 70240
+22 140 006 754
contact@motortruckservices.com