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Q.How do I convert my sole proprietorship to an LLC?
A.Under California law, a sole proprietorship cannot be converted into an LLC, but a sole proprietor can form an LLC. No conversion takes place because the sole proprietorship is not a distinct entity. A conversion process occurs when a business was formerly operated as a partnership or limited partnership and now wants to convert to an LLC.
Formation of an LLC occurs upon the filing of Articles of Organization (Form LLC-1), which should be followed by the creation of a detailed Operating Agreement and the filing of the Statement of Information. As California now allows single-member LLCs, there is no need to add another individual to the filing, or your spouse as a member. However, if you are married it may be in your best interest to do so.
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