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”
- By the way, I’ve shared the letter I sent to the IRS in the comments below &mdash click here to see it.
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
» This entry was filed under Advice and tagged with: ein, irs, llc, tutorial
96 Comments
TOMAS
@Mike – I haven’t had a chance to investigate whether or not anything has changed with regard to going from a multi-member LLC down to a single-member LLC, but have had two individuals at the IRS tell me two different things before I finally got the information I was looking for.
Also, be sure to call the number listed on your EIN documents and speak with someone who handles EIN specific requests for the best results (that is if you haven’t done so already).
Aug 28th, 2009
Mike
Thanks Tomas- I called again to the IRS and was told the method you’ve described above ‘would probably be fine’.
Sep 2nd, 2009
TOMAS
@Mike – That’s good to hear, and hope it works out for you.
Oct 19th, 2009
Jolina Hodgman
Hello there my question is my husband and I form an LLC and we use my socail security to apply for EIN and IRS issue an EIN #.
I want out of the LLC is that mean he has to apply again for the new EIN # being I used my social security and I will be exiting out. Also since its an LLC if I don’t inform IRS that I know longer part of the business will they come after me in the future since it was under my social please advice?
THanks,
Jolina
Dec 4th, 2009
Shalakay
Is this neccessary when changing from and single member LLC to a multi member LLC?
Dec 16th, 2009
Shawn
Tomas,
Did you recieve any kind of fax response or other correspondence from the IRS to confirm the change request was accepted?
Thanks,
Shawn
Jan 9th, 2010
Shannon
I am trying to change one owner to another president of the LLC Company. I would then need to update my EIN#…correct? Where do I start to change the owners of the LLC?
Jan 14th, 2010
Duong
Hi Tomas,
I plan to send a converting from partnership to sole proprietorship letter to IRS. I live in Alameda county of California. The IRS lady told me to send letter to IRS, Ogden in Utah, but I check the IRS website showing the address in Fresno, CA.
Should I send the letter to Ogden, Utah?
Thanks a lot in advance.
Regards,
Duong.
Feb 3rd, 2010
Kay
I applied for an EIN online, and when they asked for which state I was going to file for an LLC in, I put WY, which is where i live. I since realized that I should form an LLC in CO, since thats my place of business. Can I just file for an LLC in CO, or do I have to file in WY, then as foreign in CO? thanks.
Feb 11th, 2010
Jim
Hello Tomas,
I kinda messed up when I filed my business with the state, I had read your thread on changing over to a single member, but I need to know where I find the Articles of Amendment in order to sisend a copy.
Thankyou Jim
Feb 25th, 2010
Jim
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Feb 27th, 2010
Melissa
I am in the same situation as the author. So, what did you put in the Amendment of Articles of Organization? The state of Nevada provides a blank field with the header:
“The articles have been amended as follows: (provide article numbers, if available)*”
I assume that I reference the original Articles, number 5, that specifies the name and address of each manager and managing member. Originally, there were two. So, in the Amendment, do I state the removal of member 2? Or do I simple state the existing member 1. I am probably over-thinking this, but an example of how you specified this would be appreciated.
Apr 1st, 2010
Pradumna Shahi
Hello there
I recently faxed IRS a letter asking them to correct my business name. Somehow the spelling of our business name was entered wrong (should be Capital but was spelled Captal). I haven’t heard back from IRS and don’t know how long it takes. Any idea how long does it take on average to hear back from IRS with a new EIN?
Thanks
Pradumna
Aug 3rd, 2010
Brian
I just wanted to say thanks for the information. I was having problems with this issue. Where can I go to understand the tax ramifications of having the other member leave.
Aug 20th, 2010
Sharon Johnson
My father has owned a sole proprietorship for over 30 years and is in failing health. The problem is, my younger brother who has been helping him with the contract has been pressuring him to transfer the company into his name but my dad wants to do that. 1) Can a sole proprietorship in Richmond, VA be transferred from one person to another? 2) If we were able to do it, will that absolve my father of any liability even on one contract between him and a large corporation that is not slated to end until 12/1/12? 3) Would that company be able to allow my brother to take over the contract or do they have to put it up for rebid? Any help will be greatly appreciated. Thanks!
Sep 1st, 2010
richard
First of all I just want to say thank you for this very helpful blog you have going here, but now after reading im still confused. Im wanting to turn my small business into an LLC I already have an EIN that I obtained years ago for a car wash that I used to do and my question is that now that I have a completely different business would I need to apply for a new EIN? Also my current EIN is linked to my ssn and that is going to hurt me if I keep opening credit accts. I would like to have an EIN where I could use instead of my ssn for credit purposes, is there any way of doing this? thank you
Oct 20th, 2010
Teresa
Thank you so much for posting this information. It has helped me a lot with my conversion process.
Dec 13th, 2010
Mercedes
I started my own business a couple of years ago, I had no clue where to start so I did the following; File the Articles of Organization under Spanish For Fun with ony (I) as an owner, did not get a business lic until after a year when my friend decided to become a partner, we then file for an EIN and were doing business for two months, she got paid for those two months but then she decided to leave the LLC, when I filed for the EIN the company names was filed as a corporation. I did what the irs asked me to do, send a letter changing it from a corporation to sole propiator and delete my friends name. Now I am confused which irs forms I need to file. My friend insists that I have to file form 1065 and she wants a document with all incoming income and expenses for those two months she was a partner. My questions is; the Articles of Oganization were never changed to two owners and if the business lic was corrected, and she only made $400, does she have to report it to the irs and does she have to pay taxes for all the incoming income or just the $400?
Jan 30th, 2011
Stephanie
I have sort of a different kind of question. I want to get rid of someone on my llc that has never done a thing nor ever comes around. Any ideas? I took her off of sunbiz, changed the name, ein num, everything needed to start a new business. Even had the lease put just in my name. Any ideas on if she can sue me or not, we live in FL
Feb 7th, 2011
Scott M.
I created a LLC and got an EIN for it several years ago. I never operated a business or filed anything with the IRS under that EIN number or LLC name. I recently changed the LLC name with my state and started operating a franchise under the LLC. My question is do I have to get a new EIN or change the company name the EIN is listed under with the IRS?
Apr 3rd, 2011
Rusty
I formed an LLC through an online service. They are acting as the registered agent (at a monthly fee). The friend took a job that will not allow him to continue with our company. LLC was formed in Feb/2011 and now he needs out. We have done no business and made no money. He has not even signed anything. We have a FEIN # and I am the only name besides Co. name listed on it. The Operating Articles have not been signed. It is set up that I am 51% owner, manager, and responsible for the tax management. We are on good terms. What steps need to be taken in order to remove him and leave me as the sole member? Also I would like to change my registered agent, as I do not want to pay a monthly fee.
Apr 11th, 2011
Rich
Aloha,
I live in Hawaii and I started a multi member LLC with a friend of mine in march. We filed for the trade name, got our EIN and filed my partner as the registered agent. However, we have not yet filed for the general excise tax license (BB-1 packet). My partner is now backing out to take care of some family issues. So, I was wondering: 1. How can I change the name of the company, 2. How can I change to a sole proprietor non LLC and 3. Do I need a new EIN? If so, what form do I need for that??
Apr 27th, 2011
Janet
Hi there, the info on removing a member from the LLC and keeping the same EIN still applies. The only thing that might be different is the address. Since I am in Arizona, I am mailing to: IRS, Attn: BMF Entity Unit, Ogden, UT 84201. I am mailing my letter today (thank you!)…a process made a whole lot easier with the info provided here. Why ISN’T this info on the IRS website? Sigh…
May 4th, 2011
Ryan
Thank you so much for this site it is extrmely helpful..yes why indeed is this information not on the IRS website, it has to be a very common scenario in the LLC world. Formed a 2-person LLC, I was the one to register for the EIN on the IRS website and it requires you furnish a SSN# in order to get an EIN, so I provided mine. I just want to know that in case I have the leave the LLC I want a neat and clean mechanism to dissassociate my name/SSN from the EIN and I looks like you have to write a letter. Thanks!
May 23rd, 2011
KMartin
HI! Thanks for your helpful info! My company is a disreguarded entity LLC, with only one member-me. Constuction field. When I filed ss4 I recieved TWO EINs, one for me as a sole proprietor and one for the LLC. The letter from the IRS stated that it is mandatory for these two numbers to be issued together. Which of these two numbers do I use to issue 1099s to subcontractors, to pay them and which of these numbers do I use to fill out a W9 for a client, to get paid? According to the IRS website (dont quite understand the logic behind it…) it says use the sole prop. EIN for filling out a W9 to get paid from client. but doesnt say which EIN to use to issue a 1099 to a sub that worked on that job that the W9 was filled out for. Doesnt it seem like the two EINs used would be the same # (which would be the sole prop. EIN)? IF that is the case, why would I even need an EIN for the LLC? Maybe just for a bank account or something?
Thank you for all your great info!!
Jul 8th, 2011
Vipul
YOU ARE AWESOME…showed me the path..Thanks a lot!
Just called IRS at the number you provided and they were very very helpful in providing me information i was looking at!
Jul 26th, 2011
lyili
i mistakenly registered as a partnership with the irs but an llc with my state. how do i fix it?
please help!
Oct 26th, 2011
Mei Tan
Thank you so much Tomas! This is so helpful! I’m in the State of California and was advised by so many different CPAs & Attorneys so many different things. Just out of curiosity though, if you convert from and single member LLC to an S-Corp, is it considered an entirely new entity? Do previous debts of liabilities from the LLC transfer over to the newly converted S-Corp? Thanks!!
Dec 3rd, 2011
Mike
I gave my Father money to start his business . As a gesture he put My wife on and I on the LLC. We have never received any payment from the company. I have recentaly found that he has not paid sales tax for the last three months Our accountant feels like we are now liable for taxes and we should have our names removed for the LLC. What are your thoughts?
Dec 18th, 2011
Tom
http://www.irs.gov/businesses/small/article/0,,id=98011,00.html
Dec 20th, 2011
Chris
For all the folks asking questions here, it’s really easy and fast to get a response from the IRS phone number. Don’t be afraid to go to the source.
In my case, I requested an EIN exclusively for a rental property and created as a partnership (by including my wife which I do on everything.) Well, in this case, that was a bad decision since it requires filing a separate Form 1065 Partnership Income which I do not want. Also, call your Secretary of State office to confirm if you need to file any amendments. In my case, Colorado does not record other owners so I didn’t have to make any changes/pay additional fees.
They asked me to send a letter explaining that I was now the sole owner and to convert to a single-entity LLC vs. a partnership so I can file a schedule C and not Form 1065.
I was told to send this letter to:
IRS
Ogden, UT 84201
Attn: BMF Entity <—– told this is short for "business master file"
I was told this will take 8-12 weeks to process and I can request a written confirmation to be sent (which I did).
Thanks Tomas–at least you got me in the right direction. Hope this helps others.
Dec 30th, 2011
Michael
Thanks very much for this excellent help. Good karma to you.
Jan 5th, 2012
Ed
I have a cafe in NJ for 8 years and is a registered as LLC with my partner. He has decided that he is leaving and no longer wants to do this any more. I have decided to buy him out. I wanted to know what is the best solution for my business now. If I want to become a single member LLC, do I need to close my current LLC to get a new EIN?
Jan 11th, 2012
Steve
I must have gotten a crabby seasonal worker when I called. He told me no way I could change my status from llc partnership to a sole proprietor. I had try to explain to him my wife and I just opened the business in August 2011 and this would be our first tax year. She decided she would rather not be involved with the business. I have everything tied to my original EIN umber and really can’t change it. I guess I will call back at another time and speak to someone different and see what response I get.
Any other suggestions?
Jan 24th, 2012
catherine
Do you have to have a lawyer do the Articles of Amendment with the changes to your LLC?
Feb 1st, 2012
Ben
Thanks a ton! You just made my life a whole lot easier 🙂
Feb 15th, 2012
Cathy
My husband formed a corporation in Delaware with a business partner. At this time, due to his regular job he is unable to help out with the corporation. He would like to have his name removed from the corporation. He will not be asking for a buy out, nor will he receive any monies from this. Can you tell me how to go about removing his name.
Thanks.
Feb 17th, 2012
Bryan
Steve- This article deals with converting from a multi-member LLC to a single-member LLC. You need to use this exact terminology when calling the IRS to ask your question. They are correct in what they said. If you want to convert from an LLC to a sole proprietor you need to dissolve the LLC then simply operate as a sole proprietor. The exact procedure for wrapping up your LLC is specific to your state.
Catherine- You don’t need a lawyer for articles of amendment, but if it makes you feel more comfortable you could use a service such as Legalzoom to draft it.
Cathy- Assuming you are referring to an LLC, have the remaining principal member draft an amendment to the operating agreement declaring your husband’s withdrawal which they both sign. Also, depending on the state the company may also need to file an amendment to the articles or incorporation or an annual report to record the withdrawal. If your husband is a co-signer on any company bank accounts he will need to be removed. Finally the company will need to issue a final K-1 (partner’s share of income/expenses) for the time he was there. Good luck!
Feb 19th, 2012
Tim
I registerd my business as a LLC in Pennsylvania. I am the only member of the LLC. On the notice that I recieved from the PA Bureau of Corporation Taxes a Federal EIN# was listed beginning with PA in this format PA-#######. I didn’t apply for a federal EIN to my knowledge. Also everything I have read indicates that a number should lead instead of PA? Can you help me understand how this works. I was just going to file taxes under my personal Social Security #, but should I use the Federal EIN that was on the notice?
Apr 3rd, 2012
Rk
Hi Tom,
I have formed a LLC with sole proprietor. This company bought another S corporation. Now I have to file the tax returns. Can I use the same FEIN of the company as the name does not changed but it was linked with previous owner SSN. Now my question is can I link FEIN with my SSN and use the same FEIN to file tax returns. please advice me on this issue.
Mar 12th, 2014
Emmitt
Tomas and anyone who is reading this … on the following link, the last comment by Dana Atchley gives a lot of helpful info related to the original question here …
http://www.avvo.com/legal-answers/is-it-better-to-be-classified-as-a-sole-proprietor-731651.html
Jun 20th, 2014
angela
How can I change a partnership to a sole proprietor and use the same ein number. We applied using wrong classification it should be sole proprietor instead of partnership
Mar 9th, 2015
Mark Collins
Myself and a friend formed an LLC in Arizona, I need to take my friends name off the LLC and become the sole owner, after this has been accomplished I want to change to a Sub Chapter S Corporation.
What forms to we file to get my friends name off the LLC so it shows me the sole owner. Problem is he has bad credit and it bogs us down trying to operate the Business. Do I need a new EIN the name of the business doesn’t change I just need to become the sole owner.
Apr 2nd, 2015
michael Petry
Hello !
I own my own LLC by myself! My problem is someone else Fraudulently illegaly filed on my llc name with my permission and I need to get my own EIN number assigned to me so I correctly pay my taxes for this year , can you please help me to fix this
thanks
Michael
Apr 8th, 2015
Rebecca
Hi,
My husband is the Sole MBR of the company. He want’s me to add myself to the business. We have an LLC. Can I add myself without changing the EIN?
Thanks
May 14th, 2015
Corpely.com
Examples: A single-member LLC may decide to use the disregarded entity designation when the LLC files its Application for Employer Identification Number (EIN) on Form SS-4 .
Aug 21st, 2019
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