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4 Replies Latest reply: May 4, 2012 12:16 PM by dannowhite RSS

Changing the type of a company

Aenergy Newbie
Currently Being Moderated

Greetings Everyone!

 

   I am glad I found this place... !!! A great place to meet bright minds which in conbination it becomes a limitless source of wisdom...

 

So here is my first question: I am the only shareholder in an S corp which is being dormant since its creation. Is there a way to change this S corp into an LLC?

 

Your help is greatly appreciated,

  • Re: Changing the type of a company
    LUCKIEST Master
    Currently Being Moderated

    Luis, Do you have an accountant??

    • Re: Changing the type of a company
      Aenergy Newbie
      Currently Being Moderated

      Aenergy,

       

      Why are you wanting to change to a LLC?  What kind of industry are you in?  Changing will be difficult as different states have different rules and being an S Corp, you're dealing with federal taxes, not state which getting in trouble with the IRS isn't any fun.  Check out this answer:

       

      ------------------------------------------------------------------------------------------------------------------------------------------------------

      Thank you moderator for your note:

       

      Thank you for your reply...

       

         Well, in 2003 I though I wanted to go into business for myself, I am a home contractor, so my cousin who is a lawyer told me do not worry about it, I will get you a company made. I am the guy who comes to your house, do your energy audit, make a report regarding your home and then do the work, so I do not understand anything about taxes, companies or how to run them.... so he, my cousin created an S corp for me, and I did not do anything with it, so it exist in paper only, no assets, no anything. So now I really want to get a business started and I had an appointment with a Score person, and she told me that a S corp was the wrong way to go about it because it would be just me, maybe one other person. So she was wondered if the Corp could be changed to an LLC (She said something that as a Corp I was going to be paying twice the taxes, etc.)  but she did not know how to go about changing it, and if worse came to worse, she recommended to close the corp and open an LLC then....

       

      So I am asking questions since I am kind of clueless as you can tell,

       

      Thank you for your email,

      • Re: Changing the type of a company
        dannowhite Apprentice
        Currently Being Moderated

        Personally, I'm not sure why she would want you to change to an LLC when you already have a S Corp. What benefits are you looking for in your business from an LLC?  LLC are more flexible in their operating procedures, no requirement to keep minutes, & flexibility in profit distribution.  On the other side, the LLC must be dissolved if a member dies or goes through bankruptcy & they can't issue shares of stock to raise capital.  There are there pro's and con's, it's up to you which route to go.  My personal opinion, it's gonna be a hastle to change it to an LLC, why not just leave it alone?

    • Re: Changing the type of a company
      Aenergy Newbie
      Currently Being Moderated

      Luckiest,

       

        The accountant I am using had no idea.....

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