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How to switch from Sole Proprietor to Corporation
I have a five year old audio visual service and equipment rental business which I started in 2002. A tax professional I'm considering using this year suggested that I change from being a sole proprietor to a corporation in order to take advantage of the benefits of being an s corporation. I have established bank, credit and merchant processing accounts as a sole proprietor. My question is this. Do I have to start from scratch with a new business name and EIN # and open new accounts after I register with the state as a corporation? Is this my only option or are there others? Thanks for your suggestions.
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If you become a corporation you will have to change all your banking information and EIN because it will no longer be owned by YOU but by the CORPORATION. The biggest advantage of a corporation is that your personal assets are protected, which is not entirely true. Most companies, including Yellow Pages and credit card processors require a personal guarantee even if you are a corporation. As an S Corp the profits/losses pass through to you, I don't know how you would benefit
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