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What is an Entity Conversion and can I convert my sole proprietorship or partnership to a limited liability company (LLC) or corporation?

An entity conversion is a filing that is made with the state of incorporation that allows a company to change from one business type to another. As an example, if a business was originally formed as a limited liability company (LLC) and the owner wishes to change the structure to a corporation, they may wish to file a conversion as opposed to forming a completely new business.

If you are a sole proprietorship, you can become a corporation or LLC, but it is not considered a conversion. You need to incorporate your business as a corporation or LLC and transfer the assets of your old company into the newly-incorporated business. For more information on entity conversions, contact BizFilings.

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Business Credit Tip

If you're a sole proprietor or a business owner with fewer than 20 employees, your personal and business credit scores are closely linked in the eyes of banks and other lenders. So it's important to take steps to protect both. You should monitor, evaluate and protect your credit standing just as you would protect any other business or personal assets. Learn more about protecting your credit.

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