You have made many moves over the years to help your small business grow. You have reached many milestones and successes that now have you considering expansion. Depending on the type of business structure you currently operate under, you may find that the entity no longer suits the needs of your company.
When you come to this realization, you may wonder what steps you should take. Fortunately, you have options for changing your business structure to one that better fits your operations. You may have one or many reasons for wanting to make this change, but whatever steps you take should act in the best interests of your business.
What happens when you change entities?
Whether you change your business structure due to hiring more employees or because you want less financial liability on your shoulders, you will need to take the proper steps to modify your entity. The exact actions you will need to take will depend on what type of structure you currently operate under and to what entity you hope to change. If you feel unsure, you may find it helpful to enlist the assistance of a knowledgeable business law attorney.
What other aspects will need to change?
When you change your business type, you will likely also need to alter other aspects of your company. For instance, if you currently run a limited liability company, it is likely that your company has "LLC" in its name. If you change to a different entity, you will need to legally change your business name in order to remove that designation and add any new designations.
A name change will have considerable impacts on your paperwork, including those associated with licenses and taxes, so you will need to make sure you notify the appropriate parties. Changing your entity will likely also mean that you need to request a new employer identification number from the Internal Revenue Service, and you will need to inform anyone associated with your business operations -- such as customers/clients, vendors and investors -- of the coming changes.
What can you do to smoothly transition?
Changing your business entity can help your company operate more efficiently and help you feel less overwhelmed by certain financial aspects of your operations. Because many aspects of your company will need to go through certain changes in order to transition to the new business type, you may want to make sure you complete each step properly. Fortunately, there are legal professionals available who could help you with the process.