Home » IRS » Do I need a new EIN if I change from Sole Proprietor to LLC?

Last updated July 28, 2021

Do I need a new EIN if I change from Sole Proprietor to LLC?

Yes, if you have an existing Sole Proprietorship with an EIN and you want to change your Sole Proprietorship to an LLC, you will need a new EIN from the IRS. This is regardless of whether or not you have a DBA.

Even though a Single-Member LLC is, by default, taxed like a Sole Proprietorship, the IRS looks at the Sole Proprietorship and the new LLC as two different “entities”… therefore they require that you get a new EIN for your LLC.

(related article: how will my LLC be taxed?)

There is some confusion about “transferring” the EIN associated with your Sole Proprietorship to your LLC. You’ll often get mixed answers depending on who you speak to at the IRS or what you read online.

However, even if you mail a letter to the IRS requesting that the EIN be transferred from you as a Sole Proprietor to your LLC, the IRS will mail you back a rejection letter.

If you look at the “Do You Need a New EIN” page on the IRS’s website, it says the following for Sole Proprietors:

Sole Proprietors

You will be required to obtain a new EIN if any of the following statements are true:

  • You are subject to a bankruptcy proceeding.
  • You incorporate.
  • You take in partners and operate as a partnership.
  • You purchase or inherit an existing business that you operate as a sole proprietorship.

You will not be required to obtain a new EIN if any of the following statements are true:

  • You change the name of your business.
  • You change your location and/or add other locations.
  • You operate multiple businesses.

We highlighted “You incorporate” since this is what the IRS considers you to be doing.

Note: We know this is a bit confusing since the verb “incorporate” means to create a Corporation, not an LLC. An LLC is “formed”, not “incorporated”.

So what should you do?

If you decide to form an LLC, wait for your LLC to be approved, then apply for a new EIN for your LLC.

Note: In a few states, you actually need to get your EIN before your LLC is filed (ex: Louisiana), however, in most states, you want to wait for your LLC to be approved before applying for your EIN. Check out our how to form an LLC page for instructions on all 50 states.

You don’t have to write “final return” on your Sole Proprietor Schedule C. You’ll just file a new Schedule C to report the LLC’s income for next tax year. If your Sole Proprietorship has a DBA, you can cancel/withdraw it after your close your Sole Proprietorship.

Matt Horwitz
Founder & Educator, LLC University®
Matt Horwitz has been the leading expert on LLC education for the past decade. He founded LLC University in 2010 after realizing people needed simple and actionable instructions to start an LLC that other companies weren't offering. He's cited by Entrepreneur Magazine, Yahoo Finance, and the US Chamber of Commerce, and was featured by CNBC and InventRight.
 
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.

58 comments on “Do I need a new EIN if I change from Sole Proprietor to LLC?”

Disclaimer: Nothing on this page shall be interpreted as legal or tax advice. Rules and regulations vary by location. They also change over time and are specific to your situation. Furthermore, this comment section is provided so people can share their thoughts and experience. Please consult a licensed professional if you have legal or tax questions.

  1. I want to use my DBA from my sole proprietorship as the name plus LLC on my new LLC. Do I have to cancel the DBA (how?) first so the name is available and then file my articles of Inc.? Or is there someway to transfer the name without waiting for the withdrawal to be effective?
    Thank you.

    • Hi Julia, I don’t understand your question. Can you please rephrase it with more details. Thank you.

  2. I just requested an EIN from the IRS as sole proprietor a week ago. However I changed my mind and want to make my business an LLC instead. Can I form and LLC and request a new EIN number without having to do anything else with the sole proprietor EIN or do I have to notify someone to cancel or convert it?

    • Hi Peta, yes, you’re correct. You can just go ahead and form an LLC and get a new EIN. If you’d like, you can cancel the first EIN: cancel EIN with IRS. It’s optional though.

  3. Hello,

    Just so I’m clear on this…

    I acquired an EIN for my massage therapy practice a couple of years ago. I just got my LLC approval for the same business a couple of days ago. I have not changed anything. I am the sole member. I have no employees. I want to attach my existing EIN to my newly approved LLC.

    So, you’re saying it’s NOT possible to combine them and a new EIN is needed?

    • Hi Davis, that is correct. The IRS wants you to get a new EIN for your newly-formed LLC.

  4. So I have a sole proprietorship that I have been paying taxes on using the EIN, I would like to now move that business under my LLC which has a different name & different EIN, can I do this?

  5. Hi Matt,
    I just formed an Sole Proprietorship with the IRS online and received my EIN to start my business. I am an insurance agent for a company which I have always been 1099 from the company (independent contractor) Should I form a LLC since it’s just me anyways? No employees. Am I better off in canceling my sole proprietorship EIN and start LLC. Want to start building business credit is my goal and start Amazon FBA or even E-Commerce business. Please help and advise thank you

    • Hi Minh, if you want to build business credit and have the option to expand your business later (possibly hiring employees and/or changing the tax election of your LLC), you’ll want an LLC with its own EIN. So yes, you can cancel the first EIN if it’s no longer needed and you don’t want to operate as a Sole Proprietor. However, it sounds like there are two things going on here. It sounds like on one hand, you want to receive payments to an LLC for your insurance business… and you’re also considering another LLC at some point for an Amazon FBA and/or eCommerce business. While (typically) both business activities can be run under one LLC, it is not always advised as your “clumping” your liability all under one roof. It may be wise to consider two different LLCs. Furthermore, if you are a license insurance agent in California, you have another set of rules that govern your licensed activities. Those are administered by the California Department of Insurance. We don’t regularly deal with insurance agents carrying out activities with an LLC, so you’ll need to look into any special requirements with the DOI (we recommend giving them a call). Here is some overview information: California Department of Insurance: Business Entity Limited Liability Company Requirements. Hope that helps!

  6. I have a client that has an existing EIN for his LLC. It has been filed as a partnership. His partner has since left the organization and wants nothing to do with it. If we want to change this from a 1065 filing to a 1040 filing, what steps should we take? Thank you in advance for any help.

    • Hi James, in this situation they had a Multi-Member LLC (being taxed like a Partnership) and now there is a Single-Member LLC (being taxed like a Sole Proprietorship). Below are the things the LLC owner needs to do.

      If necessary, file Form 8822-B to change the LLC’s EIN Responsible Party. Wait for the IRS to return the correspondence on this before filing Form 8832.

      File Form 8832 to let the IRS know about the change in tax classification for the LLC. We don’t have an article on this yet, so the steps below should help. This is how you change an LLC’s tax classification from an LLC taxed as a Partnership to an LLC taxed as a Sole Proprietorship (at the time of this reply):

      • Enter the LLC name, its EIN, and the LLC’s address
      • 1: B
      • 2A: No
      • 2B: Skip/leave blank
      • 3: No
      • 4: Enter name and Social Security Number (or Individual Taxpayer Identification Number)
      • 5: Skip/leave blank
      • 6: C (A domestic eligible entity with a single owner electing to be disregarded as a separate entity)
      • 7: Skip/leave blank
      • 8: The date the Member left the LLC and transferred their ownership interest
      • 9: Enter the name and title (use “Owner”) of remaining owner
      • 10: Enter phone number
      • Part II (Late Election Relief): Skip/leave blank

      The following may also need to be completed:

      • Update LLC bank account
      • Update state Department of Revenue (or equivalent agency)
      • Draft a Sale of LLC Membership Interest
      • Adjust LLC basis/capital accounts
      • If necessary, file an Amendment with the Secretary of State’s office (or equivalent agency) if Members were listed on the Articles of Organization, Certificate of Organization, or Certificate of Formation
      • Amend the LLC’s Operating Agreement

      Hope that helps!

  7. Hey Matt,
    I registered for an LLC with the U.S a couple days a go and registered my business in my state not to long after. Not even knowing if my business was even accepted by the U.S. Then I dissolved it a day later because It became clear to me that I was going to have to move states and that I rushed into it to quick and now I have several questions. I already commented under different pages so I’m not gonna repeat everything, but I didn’t specify that I’m confused about when the U.S will let me know if my business is accepted because what if I move to this new state register my business in the state and the U.S hasn’t even accepted my business yet? Or am I going about that all wrong? Also I would like to change the start date of my LLC, change my LLC to a Sole Proprietorship, and change the address to a whole different state. Please help I’m nervous about taxes and everything if I don’t do this right and fix it.

    • Hi Sai, you only owe taxes if you actually owe taxes. You don’t owe taxes just because you have an LLC. First, the LLC is formed at the state level. Then an EIN is issued by the IRS for federal (national) taxes. It sounds like you applied for an EIN before your LLC was approved. Applying for an EIN should only be done for an already-approved LLC. Getting an EIN doesn’t form the LLC. What state did you form your LLC in? We’re not 100% sure exactly what you did, but it might be easier to cancel the EIN and dissolve the LLC with the state. Then form the LLC in the correct state you want, wait for it to be approved, and then apply for another EIN for the new LLC.

  8. Hi I am switching from a Sole Proprietorship DBA to an LLC. When applying for the federal EIN should I place my LLC start date as the date I originally started my business or the date my LLC was approved?

    • Hi Tiera, no, you’ll want to enter an LLC start month and year that is the same month and year that your LLC was approved. Hope that helps :)

  9. Hi Matt,

    I’ve had an LLC since 2008. Three years ago I sold my primary franchise business (s-corp, dba) however I kept the LLC and pay the annual report to keep it alive.
    Now I want to purchase a new business/franchise that is in a different category as previous business. Starting off I will be operating as a LLC-single owner but will likely switch to an S-corp in 2-3 years.

    Can I still use my previous TIN/EIN going into this new business or do I need an entirely new number from the IRS?

    Thank you very much for your assistance!

    • Hi Brodie, you need a new EIN for the new entity. Hope that helps!

  10. I have an EIN that was issued to me years ago as a sole proprietorship. Using just my full name. I recently filed for an LLC in Florida using a actual business name were I am the sole owner and will have 1 employee. I waited until the state approved the LLC. Then I applied for a new EIN and was asked to call the irs to process the EIN and was not issued a number automatically online. I was told that I can file for a new one but since I had a previous EIN I needed to fax SS-4 that could take 45 days to be issued. Or I can request a name change. Since that call I submitted the form ss-4 now I wait. However reading under standing the EIN on the irs site it says If you are a sole proprietor who conducts business as a limited liability
    company (LLC), you do not need a separate EIN for the LLC, unless you are
    required to file employment or excise tax returns. A limited liability company
    is an entity formed under state law by filing articles of organization as an LLC.
    An LLC owned by one individual is automatically treated as a sole proprietor-
    ship for federal income tax purposes (referred to as an entity to be disregarded as
    separate from its owner). Report the business activities of the LLC on your Form
    1040 using a Schedule C, Schedule C-EZ or Schedule F.

    So my question is cant I just use the EIN I have and submit for a name change from my name to the LLC since I would be considered as a sole proprietorship for tax purposes anyways? Or can I use the one I already have and just submit a name change

    Very confused! I am in a holding pattern until I have an EIN but the more I read the more confused I get. Thanks in advance for your answer.

    • Hi Lazaro, because your LLC will have an employee, you’ll need a new EIN. Did you apply for an EIN online and get an EIN Reference Number? I ask because being told you need to fax SS-4 because you already have an EIN is incorrect. It sounds like you submitted SS-4 recently to the IRS. The IRS is stating 45 business days right now (about 6.5 weeks) for approval. We recommend waiting until the 7th week and then calling the IRS and requesting a copy of your LLC’s EIN (aka EIN Verification Letter 147C). Hope that helps.

        • Hi Lazaro, thank you. EIN Reference Number 101 is a name-related error message. It just means the IRS has other companies in their database with the same name. So they require Form SS-4 be mailed or faxed to them along with the LLC approval document (Articles of Organization, Certificate of Organization, or Certificate of Formation).

  11. I have an LLC when I applied for my EIN I accidently hit the button for sole proprietorship. Do I need a new EIN or can I just let the IRS know I am an LLC?

    • Hi David, if you were to write to the IRS about the issue, it can take up to 2 months before you hear back because of current delays. It’s far easier to just apply for another EIN (see EIN online instructions for LLC). And then cancel the EIN that you first obtained. You can apply for a new EIN right away. You don’t have to wait for the cancellation to go through.

  12. Have a strange situation. A doctor created a professional association and requested a EIN for a sole prop (mistake 1) instead an EIN for a corporation. An 1120-S was filed in 2019 even though no 2553 was sent in and the EIN was for a sole prop. Spoke with the IRS and they said return was rejected and letter is on the way. Can a sole prop EIN be changed from a sole prop to a corporation which was already created 2 years ago? If so, which form do I use to make the change?

    • Hi Mamoon, yes, a very peculiar situation. No, an EIN for a Sole Proprietorship cannot be changed into an EIN for a Corporation. The Corporation should apply for its own EIN.

  13. Hi Matt,

    I’m a therapist in private practice. I have an LLC and 1 EIN number for myself. I got it so I didn’t have to give clients my SSN to file with their OON insurance. Now I want to hire someone and I need my LLC to have its own EIN, I need an EIN as an employee, and I need an EIN for my new employee. . My question is if I apply for a new EIN for my LLC, what happens to my current EIN number? I need this number to be active because its how I receive payments from insurance companies. Does the EIN I currently have become the LLC’s EIN, Does it become my EIN under the LLC’s EIN, or does it just disappear and I get a new number AND the LLC gets a new number?

    • Hi Bill, what state are you practicing in? And are you a licensed therapist? When was your LLC formed? Was the EIN obtained for you as a Sole Proprietorship or for your LLC? Have you filed returns with your LLC using the EIN?

      • Texas, Licensed LPC, LLC was formed in May of this year, idk if the ein was for my LLC or as a sole proprietorship :( how can I find out? (I want to say sole proprietorship but I’m afraid Of being wrong). Next tax season will be my first to file returns

        • Hi Bill, you can find out by looking at your EIN Confirmation Letter. It should have your LLC name at the top. Under Chapter 301 (see Sec 301.003), you are considered a “Licensed mental health professional”. In that case, you are supposed to operate your business through a Professional LLC (PLLC) in Texas, not a regular LLC.

  14. I can’t seem to find that confirmation letter. I’ll have to call the irs on Monday. It is a PLLC. It just doesn’t seem to matter to the irs, so I didn’t include the letter P for shorthand messaging. Thank you for all of the help by the way!

    • Hi Bill, oh, that’s great to hear you formed a PLLC. The IRS only issues an EIN Confirmation Letter (CP 575) once, however you can call the IRS and request an EIN Verification Letter (147C). If that 147C doesn’t have your PLLC name on it, you’ll want to apply for a new EIN for your PLLC (see Apply for an EIN for LLC). The original EIN you have sounds like its an EIN for you as a Sole Proprietorship. To properly get payments routed to your PLLC, you’ll want to update the EIN with the insurance companies.

  15. Hi Matt:

    I am changing from a single-member LLC to a sole proprietorship. Can I use the LLC’s EIN for the sole proprietorship? The business name stays the same except that the letters “LLC” is removed.

    Many thanks!

    Renee

    • Hi Renee, there isn’t an official “changing from Single-Member LLC to Sole Proprietorship”. It’s better to think about it correctly: You are dissolving an LLC. And then you will operate as a Sole Proprietorship. However, there is no “conversion” since a Sole Proprietorship isn’t a legal entity. And the business name isn’t staying the same. For example, if you have an LLC called “Renee’s Pies LLC”, you will dissolve that LLC with the state. Then you will register a DBA (aka Fictitious Name, Assumed Name, Trade Name) etc called “Renee’s Pies”, which is owned personally by you and is a “nickname” for your Sole Proprietorship. So while the name are similar, they are not the same. You pretty much have it all correct, but I wanted to be clear on the semantics. And no, you can’t use the same EIN. You’ll need to obtain a new EIN for your Sole Proprietorship. I hope that helps make it a little easier to think about and avoid any confusion.

      • Thank you, Matt. The reply is very helpful. Your website has a wealth of information. Great job and please keep it up!

        Happy New Year!

        Renee

  16. I noticed your reference to the IRS page “Do You Need a New EIN” for when Sole Proprietors are transitioning to an LLC… stating that you would need a new EIN as the IRS sees that as “Incorporating” or “Forming”. However, at the bottom of that page (at least the page I landed on when I clicked for some HELP in the online EIN registration process), under LLC, where it says “you will not be required to obtain a new EIN if… (see the last of the 4 bullets)… “A sole proprietor files papers to become a state recognized entity, organizes as an LLC, and will file Form 8832 or Form 2553 to elect to be treated as a disregarded entity or taxed as a corporation or small business corporation.”

    That seems to contradict the earlier reference under the Sole Proprietorship section and reads to me that I wouldn’t need a new EIN if I go from Sole Proprietor to LLC (and I actually plan to file Form 2553 for S Corp tax status). I haven’t found this same language under the link you provided for “Do You Need a New EIN”, but again, it is currently listed when I click one of the reference links during the registration process for a new EIN, and choosing LLC as the business structure.

    Very much appreciate any feedback you have here. Thanks!

    • Hi Will, the IRS’s written guidance on the matter isn’t very helpful. We’ve had long, in depth conversations with many IRS specialists. It’s best to get a new EIN when forming an LLC.

  17. Hi.. Thanks for the advice. I’ve learned alot!

    I’ve been in business for over 9 years as “Sole Prioritor”.
    Changed entity March 4th, 2020 (right before the pandemic shut everything down)- But the problem I’m having is that because I got a new EIN # I am now considered a NEW business established in 2020. Is there anything I can do about this? Having hard time with “lenght of time in business”.

    • You’re welcome Kat! In what context are you referring to the time you’ve been in business? Do you mean for marketing/storytelling purposes or something else?

  18. My apologies maybe I didn’t “word” it correctly .
    I meant I’ve changed from sole proprietor to llc.. Same business just changed entity.. Business been around for 9 yrs but when changed entity my business is now coming up as established this year instead of 9 yrs ago.. Is there anything I can do about this?

    • Hi Kat, I understood that you changed from a Sole Proprietorship to an LLC. I’m looking to understand the context so I can address the issue. For example, when you say “my business is now coming up as…” where are you referring to that appearing? And what issue are you running into exactly? I know you’re saying the business is no longer 9 years old, but there are some work-arounds as to how you word things. Meaning, if it’s on your About page on your website, I’ll answer one way. If it’s about business finances and company history, it’s a completely different answer.

  19. So my wife operates a LLC now and Say it is in the name of “shoes.com LLC”. I have a couple scenarios I was hoping you would help me out with please:

    1. I want to take over operations of “shoes.com LLC” from my wife, would I have to go ahead and apply for a NEW EIN for “shoes.com LLC” even though my wife already has a EIN in here name for “shoes.com LLC” or can Form 8822-B seeing that the ownership is changing of LLC ?

    2. If I instead choose to operate as partners for “shoes.com LLC”. This would change the LLC from a single to Multi-member , will I have to go ahead and still apply for a new EIN or can my wife add me as a Member?
    – if she can add me as a member how would she do it for (EIN purposes)

    3. If I have to get a new EIN for the same business how would I go about obtaining this (forms to submit)?
    -my concern is that 2 EIN’s will exist for “shoes.com LLC”.

    • Hi Andre, by “take over operations”, I’m assuming you mean your wife sells/transfers 100% of her LLC membership interest to you. In that case, no, the LLC doesn’t need a new EIN. As long as the EIN was properly obtained (the LLC obtained the EIN and not your wife personally), then the EIN is attached to the LLC. In that case, you would just change the EIN Responsible Party for the LLC via Form 8822-B.

      If your wife sells/transfer some of her LLC membership interest to you and the LLC becomes a Multi-Member LLC, also no, the LLC doesn’t need a new EIN (for the same reason). In this case, you’d need to file Form 8832 with the IRS and change the tax classification of the LLC to Partnership taxation. Your wife can transfer some of her LLC membership interest to you by signing an Assignment of LLC Membership Interest form (we don’t provide this at this time) and amending the LLC Operating Agreement. The IRS actually doesn’t have a list of all Members on file. They just have one person associated with the EIN as the Responsible Party. It’s the way the IRS code is written. As an LLC owner, it’s your responsibility to file taxes appropriately, not keep an updated list of Members on file with the IRS. Furthermore, via the 1065 Partnership Return, the IRS will know who the owners are. Said another way, there is no such thing as “adding a member for EIN purposes”.

      Your last question is N/A since the LLC wouldn’t have 2 EINs. Hope that helps.

  20. Hey Matt,

    I recently transferred ownership of my single-member LLC to my friend, and filed a 8822-Bto change the responsible party. Due to the delays, this won’t be updated until several months with the IRS. I applied for the EIN a while back, but I can’t remember what entity type I requested it for. The form number is CP 575 A (would the letter after the 575 give any clue to what the classification was?)

    The name of the company in the CP 575 form did not have LLC in it, but in the state, it is registered as COMPANY NAME, LLC. Would this cause any issues, or does he have to apply for a name change too? Currently, the sales tax docs, bank accounts are all tied to the existing EIN.

    • Hi Jimmy, no, the “A” wouldn’t help. It’s not possible for us to know by what you’ve presented, especially since the “LLC” designator isn’t in the LLC name in the CP 575 (EIN Confirmation Letter). There is a chance the EIN was properly applied for by the LLC and just “LLC” was forgotten. In that case, simply changing the LLC name with the IRS would fix that. It’s best for you to call the IRS (just tell them you are the owner for the time being since they don’t have the 8822-B processed yet) and see if they can help you determine if the EIN is properly associated with your LLC. 800-829-4933 > Option 1 for English > Option 1 for EIN > Option 3 will get you to someone the quickest. Feel free to keep us posted. Hope that helps.

  21. Hi Matt,

    I know you have answered this, but I STILL need to make sure I understand correctly.

    I am currently operating my business as a SP DBA (Jen’s Professional Services). I am waiting on approval for my new LLC (Jen Jen Says LLC).

    How can I use my SP DBA with my new LLC and if so, how do I do that?

    If I can, in fact, use my SP DBA with my LLC:

    – Do I have to change my email and website name to Jen Jen Says LLC?

    Would I say: Jen’s Professional Services- a Jen Jen Says LLC company?

    Thanks in advance!

    P.S. I shared this site with so many people. You and your team are amazing. Thank you for all you do!

    • Hi Jennifer, thank you so much! You rock! No, you don’t have to change the email address or website name. Those don’t have to match the LLC name (or the DBA name). When you say “Would I say”. Do you mean on your website? In that case, for the most part, you can present the site under the DBA/brand name Jen’s Professional Services. However, in the terms of service and other legal pages (ex: disclaimer and privacy policy), the official owner of the site will be Jen Jen Says LLC dba Jen’s Professional Services. The same thing goes for legal contracts and official documents. You’ll want to use the full, legal name (LLC + DBA name). For marketing and branding, you’re usually fine to just use the DBA name.

      Now, about getting the DBA “moved” over to the LLC (aka the LLC owns the DBA). It depends on the state. You may need to transfer (called an assignment) or your LLC just filed a new DBA with the same name. What state is your LLC in?

  22. Ok, bucket list; TO WRITE A WEBSITE LIKE THAT!!! Very concise brief to the point with references! That was an amazing breath of fresh air and in my opinion this man should write every website everywhere! In my humble opinion! 👌

  23. Hi Matt,
    My husband has a body shop Reggie’s Body Shop and was a sole proprietor with an ein. We were told for better deductions, he needs to be an LLC. He changed his business to an llc and applied for a new ein. The month of January he received checks from insurance companies under his old eiin #, well this month he wants to notify all the vendors that he has a new ein # and he received a check under the new ein. What does he do when it comes to tax time at the end of the year having received funds on two different ein #’s. Please help.

    • Hi Florence, your husband will file two Schedule Cs, one for each EIN/business. Hope that helps.

  24. Hello,
    I currently have a EIN as a sole proprietor DBA and I already started building business credit. I’m converting to LLC can’t I just fill out the IRS form 8832?

    • Hi Chiquite, no, Form 8832 is for an entity making an election. Technically, you’re supposed to get an EIN for the new LLC. You can write the IRS a letter making a request to use the EIN, however, it can cause issues in the future (even if approved).

      • Ok, thanks. Do you believe I can just give the vendors that I build credit with my new EIN or I will have to get new accounts?

        • Hi Chiquita, we don’t work in the business credit space, so I’m really not sure. I’d recommend calling and/or emailing them to see what their policies are.

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