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:
- To start with there will be no employees other than me.
- I will be providing consulting to my various clients.
- 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).
- 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.).
- 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