Single member LLC question - New Jersey

[kifli]

Hi!

I am new here, so I look forward to getting some responses. I have so many questions.

My question is about my single member LLC.

I have TWO FEIN #'s: one for the LLC as a sole proprietor and one for the LLC itself.
I plan on dissolving my LLC after my 2010 are completed and would like to start a NEW sole proprietor business....do I still keep my OLD FEIN # or do I file for a new one? As I was going through the process online, I got stumped b/c I received this warning message during my application process for my new sole proprietor business:

"IMPORTANT: A sole proprietor may have only one EIN, regardless of the number of businesses you own or operate. If you already have an EIN, you must use that number for all of your sole proprietor businesses."

Any help is MUCH appreciated!

Thank you! :o

[vangogh]

Welcome to the forum kifli. I'm not really sure, but wanted to respond to help your post become more visible to those who might know.

If the EIN is specifically tied to a company name I would think you'd either need a new one or at least fill out something to show a change in business name. If it's not tied to the name then I would think there's nothing you need to do.

I would imagine the information is on the irs.gov site. In fact I found this for you

Do You Need a New EIN? (http://www.irs.gov/businesses/small/article/0,,id=98011,00.html)

On the page it clearly states you will not need a new EIN if your business name changes. That's under the sole proprietors heading too.

[jamesray50]

I'm a little confused about your post. You say you have a LLC as a sole proprietor, but you can't be a sole proprietor and an LLC at the same time. A LLC is a corporation which is an entity just like a sole proprietor is an entity. Maybe you meant you are a single member LLC, which you can be. And you can have an EIN for that entity. But then you said you had another LLC, which is where I am confused. If you are getting that error message from the IRS when you apply for an EIN as a sole proprietor then you can only have one EIN, then I believe you already have registered as a sole proprietor when you received your other EIN instead of an LLC. You can have as many businesses as you want as a sole proprietor with one EIN. But, with any type of corporation, or partnership, each business needs their own EIN. Hope I haven't confused you more.

[Evan]

I'm a little confused about your post. You say you have a LLC as a sole proprietor, but you can't be a sole proprietor and an LLC at the same time. A LLC is a corporation which is an entity just like a sole proprietor is an entity.

You could be a sole proprietor, and also have an LLC -- but that's two entities. And an LLC is a limited liability company, not a corporation -- which is a separate and distinct legal entity. You don't "incorporate" an LLC, you "organize". The terminology is different, and it's important not to mingle the both.

Regarding your EIN, each person is only allowed one EIN. So you, kifli, SSN 123-45-6789, can only have one EIN for your sole proprietorship business, and it will be that number no matter if you stop business and resume a few years later, or whatever. It's yours, you can't change it or have multiple EINs. If your an LLC but disregarded, you are also supposed to use that same EIN, and not obtain a new one -- as for tax purposes nothing really changed on paper. If you change the way you're taxed, you are supposed to obtain a new EIN.

[jamesray50]

You could be a sole proprietor, and also have an LLC -- but that's two entities. And an LLC is a limited liability company, not a corporation -- which is a separate and distinct legal entity. You don't "incorporate" an LLC, you "organize". The terminology is different, and it's important not to mingle the both.

Evan - I have to respectfully disagree with you. You can incorporate as a single member LLC and elect to be taxed as an S-Corp. I have done this myself a few years ago. I have an EIN for my single member LLC, I have corporation papers from the state of KY, and I have filed 1120S tax returns. Here is the link to the IRS website that has the info on LLCs. LLC Filing as a Corporation or Partnership (http://tinyurl.com/5swpbv4)

Although I did not know that an LLC could be a company and not a corporation, which may be the case for kifli.

[Evan]

You still don't incorporate an LLC, you organize an LLC. You're confusing legal and tax terminology. Just because you organized an LLC and chose it to be taxed as an S-Corp doesn't mean you're an S-Corp. You're an LLC, and you don't get the same "powers" of a corporation, thus the same terminology doesn't exist. If the state wanted to limit what an LLC could do, for example -- LLCs could only exist for barns, otherwise you need to incorporate -- the fact your LLC files as an S-Corp doesn't matter, because you're an LLC and need to abide by those laws in addition to the further restrictions that you may have based on your tax election.

Similarly, you COULD say your sole proprietorship will be taxed as a corporation and not go through the steps of doing it... the IRS doesn't need to accept it, but they may. And if they do, you still don't have a corporation, you're just being taxed like you were.

[jamesray50]

Evan - Now I am getting confused. I see now where a LLC is a company and not a corporation. But I have a single member LLC called J.E. Peters, INC. in Kentucky and it is taxed as an S-Corp. I own 1,000 shares of the LLC. Can I own shares of a company? According to the state it is a corporation. I am the only member of the corporation.

[Evan]

You can't have an LLC with the name "Inc". J. E. Peters, Inc. would be a corporation, and you'd be the sole shareholder of a Kentucky corporation -- not an LLC.

[Evan]

And just looking, according to your state, you are a corporation, not an LLC.

[jamesray50]

I was just going to go look for my papers. I don't know why I thought I was an LLC. Thanks for clearing everything up for me. I think next time I make a comment I will do my research first.