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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
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Experience:  Run my own successful business/contract law practice.
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My husband operates 2 retail stores as a sole proprietorship/dba.

Resolved Question:

My husband operates 2 retail stores as a sole proprietorship/dba. He has employees (he has an EIN Number). What are the steps needed to transfer the sole proprietorship from his name to mine (his wife) ? Do we need to cancel/change the Business Registration? Do we need to get a different EIN Number ?

Thanks
Submitted: 1 year ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 1 year ago.
Thank you for your question. Please permit me to assist you with your concerns.

If I may ask, are you going to take over under your own DBA and will you remain as a sole proprietor, or are going to potentially create a legal business entity for yourself first?
Customer: replied 1 year ago.


We are going to keep it as a sole proprietorship. We would like to keep the same name. The only reason we want to transfer it to my name is XXXXX XXXXX purposes.

Expert:  Dimitry K., Esq. replied 1 year ago.
Thank you for your follow-up.

One quick question, if I may. Are you going to do this in New Hampshire or a different state? Each state has their own steps for the transfer of the EIN. Thank you!
Customer: replied 1 year ago.


It will stay in New Hampshire.

Expert:  Dimitry K., Esq. replied 1 year ago.

Thank you for your patience.

Here is the process in a nutshell for a sole proprietorship, although please be aware that for liability purposes setting up an LLC or other entity may be a wise consideration.

You would need to send a letter to the IRS informing them of the change in ownership. It is, for all practical purposes, a new business entity if it is being set up under you. No form is required for this, but the IRS must be aware that a transfer took place.

Then, you would need to fill out Form 1065 and send it to the IRS denoting the change in ownership and that you are now listed as the proprietor.

In addition the New Hampshire Corporation Division requires that you also dissolve the Sole Proprietorship first. You should be able to find the relevant forms at their site below:

http://sos.nh.gov/corp_div.aspx

Once the business is dissolved, then you can move forward the restablish it under your own name. After speaking with their division directly, I was informed that a transfer cannot take place, you would need to first dissolve and then restart the business under your own name.

Good luck.

Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 37135
Experience: Run my own successful business/contract law practice.
Dimitry K., Esq. and 2 other Business Law Specialists are ready to help you
Customer: replied 1 year ago.

Thank you. XXXXX checked out form 1065 and it deals with partnerships .. ? This is not currently a partnership, or is it going to be.

Expert:  Dimitry K., Esq. replied 1 year ago.

Thank you for your follow-up.

My apologies, you are correct, Form 1065 is used if you re-set the proprietorship up as an LLP once you restart the entity. With my focus on suggesting that the sole proprietorship be modified into a business structure, I put that in as an additional step. Again, my apologies. Sending a letter to the IRS informing them of the change and letting them know that the EIN is being transferred to you is sufficient. But please at least consider placing the business under some sort of protection. While having you control the EIN will affect your taxes, in terms of liability you and your spouse will still continue to be personally liable in case anything occurs and the business entity ends up being sued, for example.

Good luck.

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