Transferring LLC Ownership with the IRS
Determining Transfer Type
How do I change ownership of an LLC with the IRS? You need to decide if you’re transferring full or partial interest. For partial transfers, decide the amount of the LLC you’re selling. For full transfers, steps include:
- Review documents
- Evaluate assets
- Make a sales agreement
Handling IRS Forms
Use IRS form 8832 if the change alters the LLC’s tax status. For changes to the LLC’s EIN responsible party, file form 8832-B. However, you can’t transfer an EIN to a new owner.
To close an IRS account, send a letter explaining why. An EIN belongs to a business entity and is never reused. If a business never starts up, the IRS can close its account but retain the EIN for future use.
Some ownership change triggers for updating information reports include buyouts, new responsible parties, and changes to the type or percentage of interest held.
If just one piece of information needs updating, a full report doesn’t need to be completed again.
To change from a sole proprietorship to an LLC, inform the IRS by completing form 8832 to notify them of the new tax classification. Submit form 8832 with a tax return copy so the IRS has details to grant or deny the status change request.
Updating Information and Address Changes
Apply for an ATIN by filing Form W-7A, and file this form with the IRS. After a name change, file Form SS-5 PDF which is available on SSA.gov or by calling 800-772-1213.
What is form 8822-b used for? Use Form 8822-B to notify the Internal Revenue Service if you changed your business mailing address, your business location, or the identity of your responsible party.
The IRS typically takes about six weeks to process a name-change letter. If you fail to provide the necessary details in your letter, the IRS may request additional information, which may further delay the processing.
You need to complete Form 8822-B and send it to the IRS to change the EIN Responsible Party for your LLC. If the responsible party for your LLC has changed, you’ll need to update the IRS as soon as possible, as per their requirements.
Identify the information that has changed (LLC name, removal or addition of owners, address/location of the LLC). All other changes should be mailed to the IRS based on the state in which the entity’s principal business, office, or agency is located.
Here are some of the parties you should consider notifying: The Internal Revenue Service (IRS). Notify the IRS of a change in ownership of your LLC, by filing Form 8822-B, Change of Address or Responsible Party – Business.
Changing Ownership in Michigan
How do I change ownership of an LLC in Michigan? Changes in business structure for domestic LLCs are made to the Articles of Organization by filing a Certificate of Amendment (form CSCL/CD-715) with the Bureau.