I purchased a business in my name ( and my husband) in march 2008. We opened up an LLC and now want to move the business into the LLC. How do we do this?
1 Answer from Attorneys
Re: business LLC
If the business consists only of personal property, no real estate, a major part of the transfer would be the owners' transferring of ownership of all the business assets to the LLC, in exchange for the LLC's assumption of the business liabilities and, to the extent the assets exceed the liabilities in value, the LLC would acknowledge, on its books, that the members who contributed the business assets had an equity stake in the LLC. Aside from preparing a simple bill of sale, this is primarily your accountant's job.
Some care needs to be exercised in transferring certain types of property, of course. Vehicles probably need to be re-registered with the DMV, and if the business has a premises lease, you'll want to work with the landlord to make sure the lease is assigned to the LLC or perhaps rewritten to show the LLC as tenant. There may be licenses that need transferring or assignment. The bank accounts will need to be changed from proprietorship accounts to LLC accounts.
You'll need a new taxpayer ID number for the LLC, if it doesn't already have one; if you have a resale permit, that'll require closing the existing account and opening a new one. If the LLC is going to use a name other than its own, as filed with the Secretary of State, it'll need to file and publish a fictitious business name statement.
If you have employees, you'll probably need a new worker's comp. policy and a new account with the California EDD.
Think about whether the change affects any franchise, trademark, patent or copyright rights the business may have acquired as a proprietorship or partnership (which it may have been since March) and any contracts, charge accounts, etc. that now are set up in your personal names. These need to be changed. You'll probably want to change the business letterhead, advertising, business cards, billheads, purchase orders, etc. to let the world know it's an LLC they're now dealing with.
Inform creditors and potential creditors of the change. Be sure to pay or provide for existing obligations (by having the LLC assume the debts).
I assume you are not running a licensed contracting business. LLCs cannot be contractors under present law.
That's about all I can think of now. I've probably left something out.
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