How do I incorporate to an LLP with 2 owners and employees from a sole proprietor company?
Full Question:
Answer:
We presume that you are referring to a limited liability company (LLC) rather than a limited liability partnership (LLP).
An LLC is a separate legal entity that can conduct business just like a corporation with many of the advantages of a partnership. It is taxed as a partnership. Its owners are called members and receive income from the LLC just as a partner would. There is no tax on the LLC entity itself. The members are not personally liable for the debts and obligations of the entity like partners would be. Basically, an LLC combines the tax advantages of a partnership with the limited liability feature of a corporation.
An LLC is formed by filing articles of organization with the secretary of state in the same type manner that articles of incorporation are filed. The articles must contain the name, purpose, duration, registered agent, and principle office of the LLC. The name of the LLC must contain the words limited liability company or LLC.; An LLC is a separate legal entity like a corporation.
Management of an LLC is vested in its members. An operating; agreement is executed by the members and operates much the same way a partnership agreement operates. Profits and losses are shared according to the terms of the operating agreement.
A new EIN would be necessary for an LLC.
A Limited Liability Partnership (LLP) is essentially a general partnership with the limited liability of an LLC. It is owned by partners rather than members.; It is may be easier in some respects to convert a general partnership into an LLP as opposed to an LLC. The partnership agreement would only have to be amended for an LLP, but redrafted as an operating agreement for an LLC.
See: Pennsylvania Limited Liability Company LLC Formation Package; PA-00LLC