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What is the process for changing the legal structure of my small business in Ohio, and are there any potential legal implications I need to be aware of?

Picture of Chris Battis By   ·  1 minute read

To change the legal structure of your small business in Ohio, such as from a sole proprietorship to a corporation, the following steps need to be taken:

  1. Determine what type of legal structure you want to change your business to. Options include a partnership, limited liability company (LLC), S corporation, or C corporation.
  2. Check if the chosen legal structure is available and compliant with state laws. You may also need to file an application with the Ohio Secretary of State.
  3. If you are changing the legal structure, you will need to file specific documents with the Ohio Secretary of State. These may include articles of incorporation for a corporation or articles of organization for an LLC.
  4. Notify the Ohio Department of Taxation and the Internal Revenue Service (IRS) of your legal structure change. You may need to obtain new tax identification numbers as well.
  5. Update any contracts, permits, and licenses that may need modifications due to the change in legal structure.

There are several legal implications to consider when changing the legal structure of a small business in Ohio. For example:

  1. Liability: The level of liability can vary depending on the legal structure. For instance, changing from a sole proprietorship to a corporation or LLC limits personal liability to the assets invested in the business.
  2. Taxes: A change in legal structure can result in a change in tax classification, which can affect the business’s tax liabilities. Consult with a tax professional to understand the implications on your tax obligations.
  3. Business agreements: Changing the legal structure may require modifying or renegotiating agreements with business partners or suppliers.

It is advisable to consult with a licensed attorney before making any legal structure changes to your small business. They can provide specific advice relevant to your business and ensure you are complying with all applicable laws and regulations.

If you need further action, schedule a consultation with an attorney who has relevant experience in business law in Ohio.