Please note: (1) this is general information only, not legal advice; and (2) I will provide you with honest information and not necessarily to tell you might be hoping to hear.
If you change the form of entity for a business the current FEIN would need to be canceled and a new FEIN issued to the new entity. FEIN are assigned to the type of entity. If a business is operated as a sole proprietorship and obtains an EIN and then later changes the form of entity to a corporation a new EIN would be required.
Here is a link that you might find helpful: www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Do-You-Need-a-New-EIN%3F
It is not difficult to cancel and then be issued a new FEIN in the future should you change entity formation.
I apologize that this was probably not the answer you were hoping to receive. However, it would be unfair to you and unprofessional of me were I to provide you with anything less than truthful and honest information. All my best & encouragement. Please note that you are asked to rate my courtesy and professionalism, and not whether the answer supports your legal position. I only receive credit when rated 3 or higher. If for any reason you feel that a 2 or 1 rating is appropriate, please first give me the opportunity to address your concerns by clicking the "reply" or “continue conversation” tab. All states have intricacies in their laws and any information given is simply information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you.
My quesiton did not ask what happens when I change the business structure of a business. I inquired as to what happens when you change the owner of the business from an individual to an Entity. For example, if I file for an FEIN and make the owner John Doe and then at a later point would like to make the responsible party ( owner ) an entity, such as XYZ Inc., how do I go about changing the owner? What are the steps? Does this require a change in busness structure? Or does the IRS simply treat this as a sale of business?
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