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Ask a Lawyer -- LLCs
LLC Question 149
Question:
I'm a carpenter contractor/sole proprietor in WI. I would like to form a LLC. My company name is already being use, A. J. Construction Inc. by someone else. It is in a state of delinquency, none the less it is still registered. If I modify my company name to something like A. J. Builders LLC or ? what do I do regarding all the state and federal filings I've done over the last 30 years, the company accounts, ein number, checks etcetera. I have had an employee until recently, who is laid off now and I don't have plans of hiring him back or anyone else. I will work alone and hire subcontractors as necessary. Will changing the name of my company complicate things significantly. Thanks Jeff
Response: I don't think it matters much which name you use from a legal standpoint on the points raised in the question. When a sole proprietorship (A.J. Construction) converts to an LLC or an S Corporation, it is required to have a new bank account, new name on the company letterhead, new name on contracts, new name on the side of the trucks, new Federal tax identification number regardless of whether the name of the LLC is 'A.J. Construction, LLC' or 'A.J. Builders, LLC'. The LLC is a new legal entity separate and apart from the sole proprietorship regardless of the similarity of name. It is also important that third parties with whom the LLC transacts business with know that they are now dealing with an LLC, not a sole proprietorship, and that all correspondence and contracts reflect this. Failure to notify third parties of the LLC's existence might damage your personal protection from business liabilities. BTW, if your sole proprietorship is on a calendar tax year, I would make the change effective as of January 1 to avoid having to file two tax returns for any year.
Submitted: 11/19/2007; Jeff, WI
Response: 11/23/2007; JJR
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