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Converting from
a Corporation to Sole Proprietorship
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Q.
Hi, I had recently
purchased a small business which was structured as a Corporation by the
previous owner. I have determined that it would be more beneficial for myself
and the business if I change the structure to a Sole Proprietorship but I have
no idea what I'll have to do to get that done or where I'll have to go. Please
help! Thank You- Vuther - Florida, USA
Advice
by
Nina Birnbach
Vice President Active Filings, LLC
Also see advice by Nach M Maravilla,
Publisher/CEO PowerHomebiz.com, LLC
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Dear Vuther,
The best way to convert your corporation to a Sole Proprietor is to open a
new bank account, get a new EIN number from the IRS and start doing business.
However, as a licensed CPA, I would tell you to speak to a qualified tax
professional such as a CPA, before you do this. The reason I am telling you this
is because with the new tax breaks that are going into effect, it is possible
that becoming either a S corporation or a LLC could be more beneficial to you in
terms of taxes. You should also consult with an attorney to make sure that you
are not opening yourself up to additional liability by converting to a sole
proprietor.
Nina Birnbach
Vice President
Active Filings, LLC
The opinions expressed in this column are those of the
author, not of PowerHomeBiz.com. Users should not treat the Guide's response as
legal, accounting, or professional advice as all answers are intended to be
general in nature. Such advice can only be properly given by qualified
professionals who are fully aware of a user's specific geographical areas or
circumstances, such as an attorney or accountant.
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