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Do I need to change my business from an LLP to an LLC?

Indianapolis, IN |

I registered my business as an LLC with the IRS and my state's attorney general office. When I printed out the paperwork I get sent, the federal government listed my business name with "LLP" at the end of it, not LLC. The state lists LLC with my business. Do I need to officially change this and if so, how would I do that? Or is this common, and it doesn't make a big difference? I am essentially a sole proprietorship but wanted to register as an LLC to avoid personal liability, as I am a life coach in private practice.

Attorney Answers 3

Posted

Business formation is done under state law. Thus, if your business is registered with the state as an LLC, you have a LLC. If the feds have a typo on one or more your tax forms, talk to your accountant about making the correction.

If this answer was helpful, please mark it as helpful or as a best answer. This answer is for general education purposes only. It neither creates an attorney-client relationship nor provides legal guidance or advice. The answer is based on the limited information provided and the answer might be different had additional information been provided. You should consult an attorney.

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Posted

No, you simply need to notify the IRS of its typographical error. Send the IRS a copy of the Secretary of State's certificate and that should do the trick; include a copy of the IRS paperwork so they know to match them up.

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Asker

Posted

Thank you. I reviewed my state forms and I actually must have registered as an LLP by mistake. I meant to register as an LLC. Any issue with keeping it as an LLP? Can I still do the taxes on my individual 1040 form and have the same liability protection as an LLC? If not, how do I go about changing from an LLP to an LLC?

Posted

i agree with my colleagues.

I would only add that you want to make sure the IRS has your tax ID number registered under the appropriate tax status. If you want to be taxed as a sole proprietorship, then your tax status for the LLC should be "disregarded entity." If you are registered as a partnership, then the IRS will be looking for a partnership return for your EIN while you will simply be filing your personal Form 1040.

LLCs are unique in that they get to choose how to be taxed. Depending on how many members there are, an LLC can be a "disregarded entity," a partnership or a corporation for tax purposes. You just want to make sure that you and the IRS have the same idea about your LLC.

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