How to convert a sole proprietorship to an LLC in Ohio
Ohio has no conversion form for a sole proprietorship. You form a new LLC with Form 610 ($99), then move the business into it: tax ID, bank accounts, contracts, licenses, insurance, and any trade name you registered as an individual.
Why Ohio has no form to convert a sole proprietorship
Ohio's LLC conversion statute, ORC 1706.72, lets an "entity" convert into an LLC. The definition of entity in ORC 1706.01(K) covers partnerships, corporations, associations, trusts, and similar organizations that have a governing statute. A sole proprietorship is not on the list, because it is not an organization at all. It is you, doing business under your own name or a trade name.
So "converting" really means two things: creating a new legal person, the LLC, and then transferring the business to it piece by piece. Customers may not notice the change. The law, the IRS, your bank, and every licensing office will, because the LLC is a different owner than you are.
If you are still deciding whether to make the move at all, our comparison of an Ohio LLC vs. sole proprietorship covers cost, liability, and taxes. This guide assumes you have decided and walks through the move itself.
What carries over to the LLC, and what has to be redone
It helps to sort the business into two piles before you start. Some things belong to the business in practice and follow it with no paperwork. Others belong to you legally and have to be moved, reissued, or replaced.
| Carries over in practice | Has to be moved or replaced |
|---|---|
| Your skills, reputation, and customer relationships | Bank accounts and payment processors |
| Phone number and website, once the accounts are in the LLC's name | Contracts, leases, and loans |
| Brand and logo | Registered trade name (assign or re-register) |
| Know-how and processes | Vendor's license and other tax accounts |
| Your own professional license | Firm-level licenses, permits, and insurance policies |
The right-hand column is the work. Budget a few weeks to get through it, and do not expect the LLC to protect anything still sitting on the right.
Step 1: Form the Ohio LLC
Formation is the shortest part of the job. Pick a name that ends in "LLC" or another ending ORC 1706.07(A) allows, check it on Ohio Business Central, appoint a statutory agent, and file Articles of Organization (Form 610) with the Secretary of State. The state fee is $99, and there is no annual report afterward. The full walkthrough is in how to start an LLC in Ohio.
Consider using your brand as the LLC's legal name
If customers know you as "Lakeside Lawn Care," consider forming "Lakeside Lawn Care LLC" rather than "Jane Smith LLC." Under ORC 1329.01(A)(2), an LLC's name of record is not a fictitious name, so an LLC doing business under its own legal name needs no separate trade name filing. That one decision can remove a step from the rest of this list.
One catch: ORC 1706.07(B)(5) bars the state from filing an LLC name that is not distinguishable from a registered trade name, and that includes the one you registered yourself. ORC 1706.07(C) solves it with a written consent from the trade name's registrant, filed with the articles. Since the registrant is you, sign the consent. If you would rather hand off the filing, our Ohio LLC formation service prepares Form 610 and files it with us named as agent.
Pick a start date too. Many owners form the LLC a few weeks ahead and switch the books over on the first day of a month or quarter, so the sole proprietorship's records end cleanly and the LLC's begin cleanly.
Step 2: Decide on the EIN with your accountant
The IRS rules depend on how the LLC will be taxed and whether it has employees. A single-member LLC is a disregarded entity by default, and the IRS's list of when you need a new EIN says a single-member LLC can use the owner's sole proprietor EIN if it does not elect corporate or S corporation treatment, has no employees, and owes no excise tax.
| Your situation | What the IRS guidance points to |
|---|---|
| One owner, no employees, default tax status | May keep using the sole proprietor EIN for income tax reporting |
| One owner with employees | The LLC needs its own EIN for employment taxes |
| LLC will elect S corp or corporate tax | The LLC needs its own EIN |
| Two or more owners | A partnership by default, with its own EIN |
Even when it is optional, the IRS says a disregarded LLC can get its own EIN if it needs one to open a bank account, and many banks ask for one. Talk to your accountant, then apply once. Our EIN filing service handles the application if you would rather not.
If you had employees as a sole proprietor, the payroll side is the part to plan most carefully. Wages paid by the LLC are reported under the LLC's name and EIN, so payroll accounts, withholding registrations, and workers' compensation coverage all need to move to the new employer.
W-9s after the switch
Customers who pay you will ask for a new Form W-9. The IRS says a disregarded single-member LLC owned by an individual puts the owner's SSN or EIN on the W-9 for income tax purposes, not the LLC's own EIN, even if the LLC has one for payroll. That surprises people. Ask your accountant to confirm what your W-9 should show before you send it out.
Step 3: Open the LLC's bank account and move the money
Open a business account in the LLC's exact legal name as soon as the articles are filed and the EIN question is settled. Do not just rename your old account. The old account belongs to you personally, even if it says "doing business as" on the checks.
- Transfer the operating cash you want the LLC to start with, and record it as your capital contribution.
- Move automatic payments, card processors, and payment apps to the new account.
- Give customers new remittance details and update the payee name on invoices.
- Keep the old account open for a short overlap period to catch stray deposits, then close it.
After the switch, keep the habits that made the old account work, but in the LLC's name. Business income goes into the LLC account, business bills come out of it, and you pay yourself by recorded draws or distributions rather than by using the business card for groceries. Sole proprietors are used to treating business and personal money as one pot, because legally it was. Now it is not.
What banks typically ask for when you open the account is covered in our guide to the Ohio LLC business bank account.
Step 4: Transfer equipment, contracts, and leases to the LLC
Everything the sole proprietorship owned is still yours personally until you move it. Decide what goes into the LLC and document it.
- Equipment, tools, and inventory: a simple bill of sale or contribution agreement listing the items and their value.
- Vehicles: retitle them in the LLC's name if the LLC will own them, and tell your auto insurer before you do.
- Real estate: talk to an attorney and your lender before deeding property to the LLC. Mortgages often limit transfers.
- Customer contracts: ask each customer to sign an assignment or a new agreement with the LLC.
- Leases and loans: read the assignment clauses. Many require the landlord's or lender's written consent, and the lender may ask for your personal guarantee anyway.
- Phone numbers, domains, and online listings: move the accounts into the LLC's name.
Contracts signed as a sole proprietor stay between you and the other party until they are moved. Until then, the LLC's liability protection does not cover them. Start with the contracts that carry the most risk.
Open invoices and jobs in progress
Pick a rule and write it down. A common approach: invoices issued before the switch date stay with you as the sole proprietor and are deposited to your old account, and all work invoiced on or after the switch date belongs to the LLC. Jobs that span the date can be finished under the old contract or moved by written assignment. Whatever you choose, apply it the same way to every customer so your accountant can follow the money.
Step 5: Handle your sole proprietor trade name or DBA
If you registered a trade name in Ohio as an individual, the registration is yours, not the LLC's. You have three options:
| Option | When it fits | State fee |
|---|---|---|
| Assign the trade name to the LLC (ORC 1329.06) | The LLC will keep using the old brand under a different legal name | $25 to record the assignment (ORC 111.16(S)(4)) |
| Cancel it and have the LLC register its own | You want a clean registration in the LLC's name | $25 to cancel, $39 for the new registration |
| Cancel it, no new filing | The LLC's legal name is the brand | $25 to cancel |
An assignment keeps the registration's remaining term; under ORC 1329.06 the Secretary of State issues a new certificate in the assignee's name for the rest of the term. If you only ever reported a fictitious name, the same choices apply. Our Ohio trade name and DBA service files new registrations if the LLC needs one.
Step 6: Update licenses, tax accounts, and insurance
Licenses and tax registrations are tied to the person who holds them, and the LLC is a new person. For sales tax, ORC 5739.17(B) says that if a vendor's identity changes, the vendor must apply for a new vendor's license. Moving from you to your LLC is that kind of change.
- Vendor's license for sales tax, if you sell taxable goods or services
- Employer withholding, unemployment, and workers' compensation accounts, if you have employees
- Municipal income tax accounts in the cities where you work
- Professional or trade licenses from state boards, and city or county permits
- General liability, commercial auto, and professional liability policies, with the LLC as the named insured
- Certificates of insurance you give to customers and general contractors
Call each agency or board before the switch date and ask what it needs. Some let you update an account; others require a new one and a final return for the old one. Your accountant can line up the tax accounts so there is no gap.
Step 7: Set up a statutory agent and records
As a sole proprietor, you had no statutory agent; legal papers came to you. The LLC must keep one on record in Ohio at all times (ORC 1706.09), and the agent's address is public. Many people moving a home-based business into an LLC choose a service so the house does not become the LLC's address of record. Our Ohio statutory agent service is $49 per business per year, with documents scanned to your portal the same business day.
Put a written operating agreement in place, even with one owner, and keep a folder with the filed articles, the EIN letter, the bill of sale or contribution agreement, and the assignment of any trade name. That folder is what a bank, lender, or buyer will ask to see.
Sole proprietorship to LLC checklist and common mistakes
- Form the LLC and confirm the filing date on the state record.
- Settle the EIN with your accountant.
- Open the LLC's bank account and move payments into it.
- Transfer assets with a written bill of sale or contribution agreement.
- Assign or reissue contracts, leases, and loans.
- Assign, cancel, or re-register your trade name.
- Get a new vendor's license and update other tax accounts and licenses.
- Move insurance to the LLC as named insured.
- Update invoices, website, signage, and email signatures with the LLC's name.
The most common mistake is stopping after step one. An LLC that exists on paper while the work, the contracts, and the money still run through the owner personally gives little of the protection people form it for. The second most common is signing new contracts in your own name out of habit. Sign as "Your Business LLC, by Your Name, Member." For anything beyond routine paperwork, especially real estate or a business with employees, talk to your attorney and accountant first. We do not give legal or tax advice.
Questions about converting a sole proprietorship to an LLC
Can I convert my Ohio sole proprietorship to an LLC without starting over?
Not with a single filing, because Ohio's conversion statute does not cover sole proprietorships. You form a new LLC on Form 610 and transfer the business into it. Your customers, brand, phone number, and website can all carry over; the legal owner is what changes. Plan the move as a checklist rather than one form.
Can my new LLC use my sole proprietorship's trade name in Ohio?
Yes, if you assign the registration to the LLC or the LLC registers the name itself. ORC 1329.06 makes a trade name assignable by a written instrument recorded with the Secretary of State, for a $25 fee under ORC 111.16(S)(4). If the brand becomes the LLC's legal name, no trade name registration is needed at all.
Do I need a new vendor's license when my sole proprietorship becomes an LLC?
Yes, because the seller's identity changes when the LLC takes over. ORC 5739.17(B) requires a vendor whose identity changes to apply for a new vendor's license. Get the LLC's license before it starts making taxable sales, and ask the Department of Taxation how to close the old one. Your accountant can time the switch so no sales fall between licenses.
Can I keep my sole proprietorship bank account for my new LLC?
No, the LLC should have its own account in its exact legal name. The old account belongs to you personally, so money in it is not the LLC's. Open the new account once the articles are filed, move payments and processors over, and keep the old account open briefly to catch stray deposits.
Do I need to close my sole proprietorship with the state of Ohio?
No, there is usually nothing to close, because Ohio never registered the sole proprietorship itself. What may exist on the state record is a trade name or fictitious name in your own name. Assign it to the LLC or cancel it. Close the sole proprietorship's tax accounts and licenses that the LLC replaces.
How do I move equipment from my sole proprietorship into my Ohio LLC?
Sign a bill of sale or contribution agreement that transfers the items from you to the LLC. List each item and its value, and date the document. Titled vehicles need new titles in the LLC's name. Your accountant will want the values for the LLC's books and for depreciation, so agree on them before you sign.
Does moving a sole proprietorship into a single-member LLC change my tax return?
Usually not, if the LLC keeps its default tax status. The IRS treats a single-member LLC as disregarded, so its activity still goes on your own return, generally Schedule C. Choosing S corporation or corporate treatment changes that. Ask your accountant how to handle the year of the switch.
When is the best time to convert a sole proprietorship to an LLC?
The cleanest time is the start of a month, quarter, or tax year. A clean cutoff makes it easy to see which income and expenses belong to you as a sole proprietor and which belong to the LLC. Form the LLC a few weeks before that date so the EIN, bank account, and licenses are ready.
Should I tell customers my sole proprietorship is now an LLC?
Yes, at least for ongoing customers and anyone with a written contract. They need the LLC's name for payments, tax forms, and new agreements, and contracts must be assigned to the LLC before its liability protection covers them. A short letter or email with the new legal name and effective date usually does it.
Does my sole proprietorship insurance cover my new LLC?
Not automatically, because the policy names you as the insured, not the LLC. Ask your agent to add the LLC as the named insured or issue new policies, and update every certificate of insurance you have given to customers or general contractors. Do this before the LLC starts working so there is no gap.
Related Ohio guides
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