Q: How can I change my corporation back to a sole proprietor. I am 100% owner.
I currently am a licensed contractor in the state of California and would like to transfer corporation to a sole proprietor. I want to keep my name the business name I operate under since I have it tattoo on my body
A:
To change your business structure from a corporation to a sole proprietorship in California while keeping your business name, you'll need to follow these steps:
1. Dissolve your corporation by filing a Certificate of Dissolution (Form ELEC STK/NP) with the California Secretary of State. This form requires the approval of the board of directors and shareholders.
2. File a final tax return for your corporation with the California Franchise Tax Board and the IRS.
3. Since you want to keep your business name, file a Fictitious Business Name (FBN) Statement with the county clerk where your principal place of business is located. This allows you to operate under a name other than your own legal name.
4. Obtain any necessary licenses and permits for your sole proprietorship. As a contractor, you will need to transfer your contractor's license to your sole proprietorship. Contact the Contractors State License Board (CSLB) to update your business structure and ensure your license remains valid.
5. Notify your clients, vendors, and other relevant parties about the change in your business structure.
6. Update your business bank account, credit cards, and any other financial accounts to reflect the change in business structure.
Please note that dissolving a corporation may have tax consequences, so it's advisable to consult with a tax professional or attorney to ensure a smooth transition and compliance with all legal requirements.
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