"D Chadha" wrote:

- quote -

This decision makes no sense, especially in light of your concern about
building a "good financial history," whatever that means.

Do yourself a huge favor and invest now in a good accountant. In addition
to the usual issues facing a startup business, you'll want to carefully
discuss your plan for employees who aren't employees.

Best of luck.
--
Phil Marti
Clarksburg, MD

--
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Hi,

I want to start a Software/Business Consulting company as a Sole
proprietor. I know it will take 6 months to year to pick up the
business. Thats why I want to start slow as a Sole prop. and then
later will convert to LLC (most probably). But I need to retain the
business history when I will convert my sole prop. to LLC because that
is required to get business from some of my big clients.

Following are few things related to this:

1. To start with there will be no employees other than me.

2. I will be providing consulting to my various clients.

3. I will be hiring temporary consultants from other companies for my
clients. Will be keeping some profit per hour in between and then
passing the remaining billing to other companies who will be paying
salary to their employees (who are working on my projects).

4. My main goal is to build some good financial history for my company
over a period of 2-3 years. Thats why I will be applying EIN for my
sole prop. (I know its not required for sole prop.).

5. I will be taking a name (DBA) say "ABC Consulting" for my sole
prop. company also. Which I want to retain later for my LLC. (or
similar one if I don't get the same name then).

My questions are:

Q1: Later after 2-3 years, if I convert my Sole prop. i.e "ABC
Consulting" to LLC say "ABC Consulting LLC", do I have to take a new
EIN ?

Q2: I am assuming that by history of my company is tax returns based
upon EIN of my sole prop. So if I can keep the same EIN for LLC, I can
keep my company history. Is this correct ?

Q3: if I have to take a new EIN while converting from Sole Prop. to
LLC, is there a way I can merge profits/finance/history of Sole prop.
to LLC ?

Thanks in advance
DC

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >