New client was set up as a partnership for 2009. They want to be a LLC in 2010 instead of a partnership. Do they need a new tax ID# for the different type of entity?
Thanks in advance fo responses.
Thanks in advance fo responses.
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I could be wrong
but I think they do need a new EIN. The Partnership must, following all terms of the Partnership Agreement, decide to liquidate and I would think distribute its assets to the partners who then create the LLC with the State and presumably contribute the assets to it. -
Entity Classification
When you say they were "set up as a partnership," do you mean that they filed articles of organization to form a partnership under state law? Or do you mean that the entity chose to be taxed as a partnership?
Before taking any action, you should carefully review the documents that were used to establish the entity in question. Many clients do not understand the difference between a partnership and an LLC.
BMKBurton M. Koss
koss@usakoss.net
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