Updating your EIN to reflect a Single Member LLC
The LLC I have was initially started with a friend. Naturally, sometimes things change, and my friend decided to leave the LLC in order to pursue other business opportunities with his family. Thankfully we parted on good terms and our friendship remains fully intact.
The only issue is that the LLC was filed as a Partnership when we applied for an EIN (Employer Identification Number), and that’s no longer the case. At this point I could’ve changed my LLC into a sole proprietorship but 1) that would require me to get a new EIN and 2) I already went through all the trouble of setting up an LLC in the first place, so I had to figure out how to update my EIN to show that I was now a single member LLC.
Side note: Arizona allows single member LLC’s but I’m not sure if this is true for every state, so check with your local corporation commission to see if that’s an option before you remove all members from your LLC. Also, there may be additional steps involved to remove/change a Statutory Agent if he/she is one of the members leaving the LLC.
(Take a deep breath…) I would think that it’s commonplace for LLC’s to go from multi-member partnerships to single member run and thus the IRS website would have instructions on how to update your EIN to reflect this change, yet I guess it’s not commonplace enough because there’s no such info to be found. (Now exhale) After spending an hour on the phone (I called 800.829.4933 option 1) trying to figure out what to do, I was shown the way by an IRS agent who I could only guess was a drill sergeant at one point in her life by the intonation in her voice. Here’s the information I was given:
To change your EIN status from a Partnership to a Single Member LLC, you must write or FAX a letter to the IRS facility where you originally filed your EIN and include the following…
- Include the legal name of the LLC.
- Include your position in the LLC. (Here I just stated Statutory Agent & Single Member)
- Include the address of your LLC.
- Include a copy(s) of your Articles of Amendment with the change(s) to your LLC.
- Include an explanation that you went from a multi-member LLC to a single member LLC and you are the only member in the LLC now.
- And address the coversheet (FAX) and/or letter to “Attention: EIN Operation”
I was also told that it’s better to FAX the letter and documents instead of mailing them since it will take an average of 4 days via FAX versus 2 weeks via snail mail to process. This is the address and the corresponding FAX for the location that I originally received my EIN from:
Department of the Treasury
Internal Revenue Service
Philadelphia, PA 19255
FAX Number: 859.669.5760
Call 800.829.4933 option 1 if you’re unsure of what address or FAX number to use, it should be on the letter that the IRS sent you when they assigned your EIN.
FYI: In this scenario, you will be taxed as if you were a sole proprietorship, yet you will still have the legal benefits of a Limited Liability Corporation.
Well I hope this information might be useful if you’re in a similar situation, and although it’s been a while since I filed for an LLC, feel free to leave a comment with any questions you may have!
Sincerely,
The Closet Entrepreneur
26 Comments
RN
I need to change a sole prop EIN to a corporation EIN. Do i follow the same procedure? Do you know of an online or email way to do this?
Jan 26th, 2007
TOMAS
RN, if you’re a sole proprietor (not a single member LLC, but an actual sole proprietor) and you are incorporating, then you will need to get a new EIN according to the IRS: here’s the link -> Do You Need a New EIN
You can apply for an EIN online by going here -> EIN - How to Apply
Again, I’m not an accountant so I would strongly suggest you call the 1-800 number I list in the post just to be sure.
Jan 27th, 2007
Eric
I was wondering if IRS Philly received and processed your fax request? I have been going on with the IRS since December trying to get them to update a name change to a LLC. Twice an IRS rep gave me the wrong information and I have sent my documents to the wrong IRS location. I spoke to an IRS rep tonight who directed me to mail everything again this time to Philadelphia. I asked if I could fax it and he said no… please tell me they processed your faxed-in request! I appreciate your help!
Feb 7th, 2007
Dr Michael
Thank you for that information - very helpful
Mar 8th, 2007
NST
Myself and 2 friends formed an LLC, some years ago. But now due to a marriage, I’ve decided leave the LLC. How do I let the IRS know that I’m no longer a part of the LLC
Jun 12th, 2007
TOMAS
@NST - I would recommend giving the IRS a call at 1-800-829-0115 to see what is necessary. From my understanding, you are not required to file taxes if your partnership with the LLC is inactive and you are not receiving an income from the company. Be sure that your friends have filed Articles of Amendment to remove you from the LLC, and note the date that the Articles of Amendment were approved and your name was removed from the LLC.
Jun 15th, 2007
Rigo
My father just formed a LLC and he already has a EIN number. Since the LLC has a company name and on the EIN shows his name. my question is: IF THERE MIGHT BE ANY PROBLEMS IF HE USES THE SAME “EIN” THAT IS UNDER HIS PERSONAL NAME AND NOT UNDER THE NEW LLC CO. NAME. Should I get a new EIN number for the new name of the copany or will it cover it, since the owner of the co. is the same owner of the new LLC’s company… I don’t want to have any legal problems if in any case the same EIN number will not cover the new formed business… Please Help!
Jul 12th, 2007
TOMAS
@Rigo - How did your father initially obtain his EIN? Did he file for a Sole Proprietorship or Partnership?
Jul 12th, 2007
Marisol
I formed an LLC along with another person, I gave my info to get the EIN he didn’t…he started the company and now I need out he’s mismanaging everything and being “deceptive”. How can I get out of this without him ruining my life?
Jul 13th, 2007
Rigo
yes, my father just formed a LLC “Sole Proprietorship”!He is conducting his own business as an LLC. He had a personal EIN number under his own name, and now that he formed a LLC, he is using his old EIN number. I’m just worried if it will cover his new LLC since the name is under a company name and not a personal name…
Jul 13th, 2007
TOMAS
@Rigo - According to IRS publication 1635 “Understanding Your EIN”, it states that if you are a sole proprietor who conducts business as an LLC, then you do not need a separate EIN for the LLC. Again, I strongly recommend that you call the 1-800 number I list in the post and verify with the IRS as I’m definitely not an EIN expert by any means.
@Marisol - I’m really sorry to hear about the issues you’re having. Please keep in mind that an EIN is a number used by the IRS to identify businesses that are required to file various business tax returns, so I’m not sure that anything can be done to terminate the EIN unless the business no longer exists or you’ve decided to leave the LLC (which sounds like something you might consider). Terminating an LLC requires that you submit Articles of Dissolution to your state, leaving the LLC depends on the operating agreement that you created for your LLC (I’m hoping you created one). Either way, once the LLC is terminated or you’ve left, then you will have to contact the IRS and have the EIN removed from your name. Again, I’m not a lawyer, so please-please consult professional advice and help.
Jul 14th, 2007
Marisol
Unfortunately no operating agreement was written or filed at the time. I have since amended the articles to reflect my removal but can I still be held liable for overdrawn accounts? How do I find out if and how much credit has been issued to the company? And, finally what is the process to remove my name from the EIN if he never gave his particulars…
Jul 23rd, 2007
Sara
We have a frachise of Window World, my boss just purchased 3 locations from his sister and brother in law. He wants to update his EIN to reflect his name instead of hers! What should he do? Follow the same procedures as above? Or try something new?
Jul 24th, 2007
TOMAS
@ Marisol - I would strongly recommend calling the 1-800 number I’ve listed in the post to get the process for clearing yourself of the EIN. If you’ve been removed from the LLC and are not doing business, then you shouldn’t have a need for an EIN (I’m assuming this is the case). You should also seek the help of a good accountant and share your concerns as they should *hopefully* have a decent understanding of the system. Also, if the EIN was used to open up a business account for your company, then you should hopefully still have access to this account information.
@ Sara - I would definitely call the 1-800 number that I include in the post, the IRS has various situations which spell out whether you may or may not need to get a new EIN altogether.
Jul 28th, 2007
Tracey
My husband & I went through a real estate course that recommended setting up an LLC to do real estate transactions. Rather than hiring an attorney, I did the LLC stuff online (PA). I am really not doing anything with the LLC, this is my hubby’s baby. I was told that multi-member LLC’s were better - tax wise - than single-member LLC’s, which is the only reason I put my name on it. however, I have pretty poor credit. Now when my husband tries to purchase and/or refinance properties, the banks are taking my credit into account since my name is on the LLC. Would this change if I changed the Operating Agreement (which the banks required) to say that I am a 1% owner/member? Should I just remove my name from the LLC?
HELP!
thanks.
Sep 7th, 2007
TOMAS
@ Tracey - My best advice to you is to consult the loan specialist that is working on your loan to see if being a 1% owner/member or a 50% owner/member makes a difference to the bank. Just remember that removing your name from the LLC takes time since you will have to file articles of amendment with your state’s business division, and I’m not sure if you want to put your real estate endeavors on hold while that takes place.
Sep 7th, 2007
bobfan
Great stuff now hopefully help for me. HAve a car lot in PA and this guy really roped me in. I am the sole member and he is a non member manager putting me at full risk. In order to dissolve there must be a 100% vote by members and managers. He dont want me out as he needs my credit so how the heck do I get out of this mess? I just want to walk away and take care of any debts but be off everything that matters.
Sep 15th, 2007
Gisele Legare
I’ve had an LLC since 2004. About 6 months ago my husband and I divorced and I legally changed back to my maiden name. Now I need to change my EIN to relect this change, yet I cannot find any forms or information of any sort to assist. Can you help?? Thanks.
Nov 19th, 2007
MJ
Many years ago I obtained an EIN from the IRS with the hope of starting my own business. Nothing happened with it. I never used the number and forgot I had it (which means I never filed taxes because nothing was ever done with the number). I’ve heard that if an EIN is never used it eventually gets deleted due to no activity. Is this true? If not, what steps to I have to take to be sure I’m not paying taxes out of my nose for a business that never existed?
Thank you!
Nov 21st, 2007
TOMAS
@ Gisele - I would recommend calling (800) 829-4933, it should be an easy fix if all you’re changing is your name. Be sure to keep us posted!
@ MJ - About the EIN getting canceled due to inactivity, I wouldn’t count on it unless you’ve heard otherwise from someone at the IRS. Call (800) 829-4933 to see if your EIN is still active, chances are they’ll probably refer you to their lengthy checklist for closing a business HERE. Also, I don’t think you have to pay taxes if your business never made a cent. Please keep us in the loop on what you find!
Nov 29th, 2007
Jay
Hi
It was an interesting read. However, in my case it is exactly the mirror image of this situation.
I used one of the online websites to incorporate my LLC in Delaware with three members. It was done exactly that way. However when the registration company went for EIN registration, they applied it as a SINGLE MEMBER EIN with just the name of the registered agent in it. So as far as IRS knows, the company and EIN has that registered agents name and it is a single member LLC.
What should be done to change it to MULTI-MEMBER LLC with my name being reflected on the IRS account. I have SSN, but the other two members dont have it as well as they are non-resident aliens who live outside U.S.
Help will be really appreciated!
Best Regards
Jay
Dec 11th, 2007
Sumit Agarwal
Hi,
I have formed the LLC with my wife. I didn’t have any income in 2006, I filed 1065 in 2007. I did consulting in 2007 and get business in 2007. I want to file schedule C instead of 1065.
What do i need to do?
Any help is very much appreciated.
Regards
Sumit Agarwal
Mar 14th, 2008
TOMAS
@Sumit Agarwal: Unfortunately I’m just a lowly Engineer and my knowledge on the inner workings of the IRS are minimal, actually I just let me accountant handle it. Unless someone on here knows otherwise, I would advise that your safest bet is calling the IRS or getting help from a professional accountant.
Mar 17th, 2008
Austin
I need to change my Buisness name but already recieved a EIN # what do I do, and is it leagl to Live and have my company building in AL while working In GA for the buisness? please contact me.
Apr 2nd, 2008
TOMAS
@Austin, if you are a Sole Proprietor, Corporation, or Partnership then there is a very good chance that you won’t need to get a new EIN to change your name - all you have to do is follow the instructions on the IRS site here: IRS - Business Name Change
As for the legality of your work setup, that’s beyond the scope of my knowledge; maybe someone else here may be able to comment.
Apr 4th, 2008
Trish
“I was told that multi-member LLC’s were better - tax wise - than single-member LLC’s, which is the only reason I put my name on it. “>>>Is this true? We’re in the process of applying for an EIN and would like to find what would be better (tax-wise) for my husband and I: multi-member or single-member LLC. Any help would be much appreciated!
Apr 30th, 2008
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