If you already have a business, but have realized or suspect that it may not be the best entity choice, its not too late to change your entity structure. This can be done with most entities, but is often seen the greatest with the limited liability company (“LLC”) and/or the corporation.
You may desire to convert your LLC to a corporation for many reasons. One may be that you initially only intended to operate your business as a private company, but now have the opportunity to take your company public. This may have to be done on both the state and federal levels. For instance, your LLC will have to be converted to a corporation with the Secretary of State using certain forms and procedures. And, your limited liability company may also have to change its tax structure (subsequent to the conversion), as only C corporations may be taken public.
If you have a corporation and have realized the benefits of the LLC or the limited liability company envelope, then you may have to do the same (change the entity structure on the state level and then change the taxation structure on the federal level). If you are considering changing your tax structure, it is important to understand that there may be positive and/or negative tax consequences to such change and proper formalities must be followed. Your Certified Public Accountant (“CPA”) will know how to advise you to complete such conversion with minimal negative consequences.
Contact the Attorneys of The Noble Law Firm, P.A. to discuss whether a business entity conversion would be beneficial for your business goals.