Do I need a new EIN when I convert a sole proprietorship to an LLC?

It depends on how the LLC is taxed. A single-member LLC kept as a disregarded entity, with no corporate election, no employees, and no excise tax, can often keep the sole proprietorship's EIN, though many owners get a new one to separate records. You do need a new EIN for a multi-member LLC, a corporate or S-corp election, employees, or excise tax. And a non-US resident with a foreign-owned US LLC effectively needs one, because Form 5472 requires it. Applying is free, so confirm your case with a tax professional.

How do I convert my sole proprietorship to an LLC?

You create a new LLC by filing articles of organization with your state, usually online, after confirming the name is available. Then you sort out the EIN (a new one if the LLC is multi-member, taxed as a corporation, or has employees), adopt an operating agreement, open a business bank account in the LLC's name, and transfer your licenses, permits, contracts, and any DBA to the LLC. The conversion is essentially forming a new entity and migrating the business into it.

Will my licenses and contracts carry over automatically?

Not automatically. Because the LLC is a new legal entity, professional and business licenses, permits, and contracts may need to be transferred or reissued to the LLC rather than carrying over from the sole proprietorship. The specifics depend on your state and industry, so check each license and account individually to keep everything valid through the conversion.

Can I use a professional address when I form the LLC?

Yes, and the conversion is a good moment to do it. Many sole proprietors used their home address by default. When you form the LLC you can use a professional business address for the registered agent and mailing address, which keeps your home off the new entity's public records instead of carrying the home address forward into all the new filings.

Converting a Sole Proprietorship to an LLC: New EIN, Asset Transfer, and the Address

Key takeaways

Converting a sole proprietorship to an LLC creates a new legal entity: you file articles of organization with the state, and the business gains liability protection it did not have before.
Whether you need a new EIN depends on how the LLC is taxed: a single-member LLC kept as a disregarded entity can often keep the existing EIN, while a multi-member LLC, a corporate election, or employees require a new one, and applying is free.
Transfer your licenses, contracts, and bank accounts to the new LLC, and open a separate business bank account to keep the liability protection intact.

Before you start

Confirm the LLC name is available in your state before filing, since it must not conflict with existing businesses.
Check whether your LLC needs a new EIN, which depends on how it is taxed and whether it has employees or multiple members.
List what has to move to the LLC: licenses, permits, contracts, bank accounts, and any DBA.

Who this is for

Sole proprietors ready to formalize and gain liability protection by forming an LLC.
Freelancers and small business owners unsure what changes when they convert.
Anyone who wants the conversion to keep their licenses, bank, and tax records consistent.

Going from a sole proprietorship to an LLC is not a status upgrade on the same business; it is creating a new legal entity and moving your business into it. That shift gives you liability protection, but it also means a new state filing, possibly a new EIN, and a transfer checklist.

File Articles of Organization to Create the LLC

A sole proprietorship is just you doing business; there is no separate entity. To convert, you create one by filing articles of organization with your state, the same document anyone forming an LLC files.

Confirm your desired LLC name is available and distinguishable in the state's business database first.
File the articles of organization with the secretary of state, usually online, to bring the LLC into existence.
Once formed, the LLC is a separate legal entity, which is the source of the liability protection a sole proprietorship lacks.

This is a new entity, not a relabel

The LLC is legally separate from you in a way a sole proprietorship never was. That separation is the whole point, and it is why the other steps, like sorting out the EIN and opening a separate bank account, matter.

When You Need a New EIN (and When You Don't)

This trips up a lot of converters. Whether you need a new EIN comes down to how the LLC will be taxed, not the conversion itself, and the application is always free when you do need one.

A single-member LLC kept as a disregarded entity, with no employees and no excise tax, can keep using the sole proprietorship's EIN, though many owners get a fresh one to keep records clean.
The IRS requires a new EIN if the LLC has multiple members (taxed as a partnership), elects corporate or S-corp taxation, hires employees, or owes excise tax.
If you are a non-US resident owning a US LLC, a new EIN is effectively required, because a foreign-owned single-member LLC must file Form 5472 with a pro forma Form 1120, which needs an EIN.
Applying is free directly with the IRS, so confirm your exact situation with a tax professional.

Keep the EIN paperwork straight

Whichever EIN the LLC ends up using, keep that confirmation safe for banking and licenses. If you ever lose it, our guide on the EIN 147C letter explains how to get confirmation of an existing EIN.

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An Operating Agreement and the Banking Step

Two steps protect the liability shield you just created. An operating agreement organizes the LLC, and a separate bank account keeps the business and personal money apart.

Most states do not legally require an operating agreement, but it is important to have, and many banks ask for one to open a business account.
Open a business bank account in the LLC's name so business and personal funds do not mix.
Mixing funds can put the liability protection at risk, since it blurs the line between you and the entity.

Do not skip the separate account

If you run the LLC out of your personal account, you risk the liability protection you formed the LLC to get. A separate business account is part of keeping the entity real, not optional housekeeping.

Transfer Licenses, Contracts, and Your DBA

Because the LLC is a new entity, the things that belonged to your sole proprietorship have to move to it. This is the step that keeps your business running without a gap.

Professional and business licenses, permits, and seller's permits may need to be transferred or reissued to the LLC.
Contracts, vendor accounts, and any DBA tied to the sole proprietorship should be updated to the LLC's name.
The specifics depend on your state and industry, so check each license rather than assuming it carries over.

If this is your first time forming an LLC, our guide on how to start an LLC walks through the full checklist. The transfer step is what separates a conversion from a fresh start, so treat your existing licenses and accounts as items to migrate.

The Address: A Clean Start for the New Entity

Forming the LLC is a natural moment to fix the address too. Many sole proprietors were using their home address by default, and the conversion is a chance to put a professional address on the new entity's public records.

Registered agent address: the LLC needs one, and a professional address can keep your home off the public record.
Business mailing address: the new entity's correspondence, banking, and licenses can route to a real street address.
A clean address from the start means you are not later untangling a home address spread across filings.

You can set up a professional mailing address through save office onboarding, pair it with a registered agent service, and check any address with our free Address Checker. For why keeping your home address private matters, see our guide on keeping your home address private when forming an LLC.

Converting a sole proprietorship to an LLC is worth doing for the liability protection, but it is a real conversion, not a name swap. File articles of organization to create the entity, sort out whether you need a new EIN, adopt an operating agreement, and open a separate business bank account so the protection holds.

Then migrate your licenses, contracts, and DBA to the LLC, and use the moment to set a clean professional address instead of carrying your home address forward. Confirm the EIN and license specifics for your situation with a professional, and your business moves into its new structure without a gap.