In the business world, change is inevitable.
If members of your multi-member limited liability company (LLC) decide to part ways and sell their business shares to you, leaving you a single-member LLC disregarded entity, there are certain steps you’ll need to take and tax consequences you’ll want to consider to properly handle the transition.
To properly change from a multi-member LLC to a single-member LLC, you’ll need to follow these steps:
1. Obtain a sales agreement.
2. Determine the sale date.
3. Obtain financials through the sale date.
4. Have the final Form 1065 prepared.
5. If hot assets are present, have the Form 8308 prepared.
6. Attach statements.
7. Provide the final Schedule K-1.
Once all other members have left the LLC, be sure to file a new tax election stating that you’d like to be taxed individually. You’ll no longer be taxed as a partnership and will instead be taxed similarly to how a sole proprietorship is taxed.
I’ll be happy to guide you through this process. Just call.