I’m changing from a partnership to an LLC, do I need to get a new tax ID? If so, I’d need to get new bank accounts and everything. It’s a big hassle.
I found an interesting article that says, “converting a general partnership in California to a California LLC is as simple as filing a form and paying a fee.” The rules may vary in other states.
Click here to read the article.
Here’s another good article on converting a partnership to an LLC.
Please note, you may still have to get a new bank account for your business even if you don’t need to get a new tax ID for your converted business. You should check with your bank.
And if you don’t meet certain requirements, you may need to get a new tax ID (a.k.a. EIN or Employer Identification Number) after all.
You can check out the IRS rules at http://www.irs.gov/businesses/small/article/0,,id=99903,00.html
More detailed rules at http://www.irs.gov/businesses/small/article/0,,id=98011,00.html
Here are the general guidelines:
If you already have an Employer Identification Number (EIN), you may need to get a new one if either the organization or ownership of your business changes. If you incorporate a sole proprietorship or form a partnership, you must get a new EIN. However, do not apply for a new EIN if:
- You change only the name of your business
- A partnership or corporation declares bankruptcy
- A corporation chooses to be taxed as an S corporation
- You elected on Form 8832 Entity Classification Election, to change the way the entity is taxed, or you change the location or add locations
- You elect to be taxed as an S corporation
The above list is not all-inclusive, so be sure to check with the IRS before making any changes.
Note: Before making any business decisions based on information on this site, it is your responsibility to check with your counsel or professionals familiar with your situation.