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<p class="MsoNormal">Timothy, your client will need to apply for a new contractor’s license and switch their insurance and bond over to the LLC. If they have vehicles they need to go to the DOR to get a waiver form so the DOL does not charge them use tax when
they change entities. Email <a href="mailto:DORcompliancedealerdeclarations@dor.wa.gov">
DORcompliancedealerdeclarations@dor.wa.gov</a>. Because the LLC is assigned a new UBI I am not sure you can just switch or update existing accounts with the various state agencies like L&I etc. If you have employees I believe you need a new EIN.
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<p class="MsoNormal"><b>From:</b> wsbarp-bounces@lists.wsbarppt.com <wsbarp-bounces@lists.wsbarppt.com>
<b>On Behalf Of </b>Robert Pampell<br>
<b>Sent:</b> Monday, April 6, 2020 4:51 PM<br>
<b>To:</b> WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com><br>
<b>Subject:</b> Re: [WSBARP] Sole Proprietorship to LLC<o:p></o:p></p>
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<p class="MsoNormal"><span style="font-family:"Arial",sans-serif;color:black">Timothy,<o:p></o:p></span></p>
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<p class="MsoNormal" style="margin-bottom:12.0pt"><span style="font-family:"Arial",sans-serif;color:black">A sole prop is not a business entity, but rather a business style, if you will. Your client, therefore, is currently just self-employed.<o:p></o:p></span></p>
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<p class="MsoNormal" style="margin-bottom:12.0pt"><span style="font-family:"Arial",sans-serif;color:black">To change business forms, you just form a new LLC. The client will get a new UBI, but can keep the existing EIN. He/she should be able to amend the existing
WA business license with DOR. The same goes, I believe, for the L&I registration.<o:p></o:p></span></p>
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<p class="MsoNormal" style="margin-bottom:12.0pt"><span style="font-family:"Arial",sans-serif;color:black">The. LLC needs to be set up properly, with an LLC operating agreement even as a single member LLC. You should run through the checklist of how to properly
operate the LLC so as to maximize the asset protection, as it is far from perfect in a SMLLC.<o:p></o:p></span></p>
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<p class="MsoNormal" style="margin-bottom:12.0pt"><span style="font-family:"Arial",sans-serif;color:black">Finally, an accountant should analyze whether it makes sense to do the S Corp election now and can also get the books set up correctly.<o:p></o:p></span></p>
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<p class="MsoNormal" style="margin-bottom:12.0pt"><span style="font-family:"Arial",sans-serif;color:black">Bob Pampell<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Arial",sans-serif;color:black">Sent from my One+ 6T Phone (Android)<o:p></o:p></span></p>
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<p class="MsoNormal" style="margin-bottom:12.0pt">On Mon, Apr 6, 2020 at 2:18 PM -0700, "Timothy Lehr" <<a href="mailto:timothy@stileslaw.com" target="_blank">timothy@stileslaw.com</a>> wrote:<o:p></o:p></p>
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<p class="MsoNormal">All, <o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">Question for corporate/business attorneys out there. A small(ish) construction business (general contractor) with 2 employees and about $70k in assets (equipment, vehicles, etc.) currently operates as sole proprietorship. PC wants to change
to LLC for liability and tax purposes. In WA, you cannot “convert” from SP to LLC, like you could for S Corp into LLC. It seems the best way to do this is to form LLC, begin switching all licenses, business assets, accounts from SP to LLC, then to dissolve
SP at the end of the year and continue business as LLC. Is this the most efficient way to accomplish the end goal? It may very well be…<o:p></o:p></p>
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<p class="MsoNormal">But are there other ways that attorneys are advising clients to change from SP to LLC while still conducting business?
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<p class="MsoNormal">Thanks, <o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal"><b>Timothy C. Lehr</b><o:p></o:p></p>
<p class="MsoNormal">Attorney at Law<o:p></o:p></p>
<p class="MsoNormal">Stiles Law Inc., P.S.<o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">p: 360.855.0131<o:p></o:p></p>
<p class="MsoNormal">e: <a href="mailto:timothy@stileslaw.com">timothy@stileslaw.com</a><o:p></o:p></p>
<p class="MsoNormal">w: <a href="http://www.stileslaw.com">www.stileslaw.com</a><o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
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