When choosing a business structure, you hope that you make the right selection the first time around.
There may come a point in the future when you need to change your business structure. This may not be the ideal situation, but it’s also not the end of the world. There are some basic steps you can take to do so in an efficient manner.
Above all else, you need to assess your options. Why are you changing business structures? What option is better for your company in the future?
From there, you need to consider the following details:
— Operational continuity
The process itself is based largely on your current business structure and the change you are making.
For example, moving from a sole proprietorship to an LLC is among the easiest transitions. Yes, you will have to file some paperwork, but the benefits you receive are well worth it.
Don’t forget to file the necessary paperwork with the In, as well as your local and state agencies. In some states, you may need to reapply for licenses.
You should also notify your bank of the change.
Since there is a lot that goes into changing your business structure, you need to consider all your options and then make a final decision based on your findings.
There are legal and financial ramifications of this change, so consulting with the appropriate professionals is also a good idea. This will give you peace of mind that you are making all the right decisions.
Source: SBA, “4 Steps to Changing Your Business Structure,” accessed June 27, 2017