Can I convert a sole proprietorship into an LLC?
Quick answer
Yes. You form a new LLC in your chosen state, transfer business assets and contracts into the LLC, get a new EIN, and start operating under the LLC going forward. The old sole proprietorship does not get formally 'dissolved' — it just stops operating.
A sole proprietorship is not a registered entity, so there is nothing to convert at the state level. What you actually do is form an LLC and move the business into it.
Practical steps: form the LLC, get a new EIN (required even if you had one as a sole prop), open a new business bank account, update contracts and accounts with vendors and clients, update licenses and permits, and transfer domain names and intellectual property to the LLC by assignment.
Tax year matters. Most founders convert at the start of a tax year to keep bookkeeping clean. Mid-year conversions are legal but require allocating income between the two structures on your personal return.
A DBA (doing-business-as) that you filed under the sole prop usually has to be refiled under the LLC, or cancelled if the LLC now operates under its legal name.
Last reviewed April 21, 2026
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This answer is general founder education and not personalized legal or tax advice. For specifics tied to your situation, talk to a licensed attorney or CPA. See all answers on Help.