To convert a sole proprietorship to an LLC in Florida, you form a new LLC ($125 state fee), get it an EIN, and move your business into it: assets, accounts, licenses and contracts. Technically, you aren’t converting anything. The LLC forms in 2-3 days. Plan on 30-45 days for the full move, and the business is only protected once it’s actually operating through the LLC.
Why switch at all?
As a sole proprietor, your personal assets are on the line for business debts. You also have no S corp election option, lenders and bigger clients take you less seriously, and the business is hard to sell because it’s tied to you personally.
An LLC fixes most of that. It protects personal assets from business debts, can elect S corp status to reduce self-employment tax, and makes it possible to sell ownership or bring in partners.
What does it cost to convert a sole proprietorship to an LLC in Florida?
| Step | Cost | Time |
|---|---|---|
| Form the LLC | $125 (state fee) | 2-3 days |
| Get new EIN | Free | Immediate |
| Transfer assets | $0 | 1-2 weeks |
| Update accounts | $0 | 1-2 weeks |
| Close sole proprietorship | Varies | 1 week |
The minimum is $125. A registered agent runs $0-$125 in year one, a vehicle title transfer costs $75.25, and moving real estate means title company fees. A typical sequence: file the Articles of Organization on day 1, approval on days 3-5, EIN on day 5, bank account by days 5-10, assets moved by days 5-15, licenses and permits updated by days 10-30, and a full transition in 30-45 days.
Step 1: Form your Florida LLC
File Articles of Organization online. Go to Sunbiz.org, click “Start an E-Filing,” select “Florida Limited Liability Company,” choose “New Filing,” fill in the details and pay the $125 fee.
You’ll need the LLC name (it must include “LLC” or an equivalent), principal and mailing addresses, a registered agent’s name and address, each manager’s or member’s name and address, and an effective date.
The name. You can keep your existing name and add “LLC,” but search Sunbiz first to confirm it’s available.
The registered agent. You can be your own (free, but your address goes on the public record) or use a service. IncCraft’s is $49/year after the first year.
The operating agreement. Florida doesn’t require one. You still want it, because banks ask for it when you open an account, and it’s the document that shows the LLC is a separate entity from you. That separation is what keeps the liability shield intact.
Step 2: Get a new EIN
If your sole proprietorship had an EIN, it doesn’t transfer. The LLC is a new legal entity with different tax reporting, so it gets its own. Apply on IRS.gov/EIN, and you’ll get the number immediately. Download the confirmation letter while you’re there.
If you had employees, register the LLC as an employer under the new EIN, file final employment returns under the old one (final Form 941 or 944, Form 940 and final W-2s), and start fresh reporting under the new one.
Step 3: Move the business into the LLC
This step decides whether the LLC actually protects you, so don’t rush it. Document every transfer in writing; a verbal transfer doesn’t hold up.
| Asset | Transfer method |
|---|---|
| Equipment | Bill of sale or contribution agreement |
| Inventory | Transfer document |
| Vehicles | Title transfer (may have fees) |
| Real estate | Deed transfer (title company involvement) |
| Business name | Assign to LLC |
| Customer lists | Contribution agreement |
| Contracts | Assignment (may need consent) |
| Intellectual property | Assignment document |
| Domain names | Update registrant to LLC |
You can’t transfer a sole proprietorship bank account to an LLC. Open a new account in the LLC’s name, move the funds over, update every payment connection, and close the old account once everything clears. From then on, keep LLC money and personal money completely apart. Running LLC business through the old account is commingling.
Existing contracts are with you personally. Assign them to the LLC where the contract allows it, and sign every new contract in the LLC’s name.
Contributing assets to your own single-member LLC is generally tax-free. No gain or loss is recognized, and the LLC takes your tax basis in the assets. For valuable assets, run it past a tax professional anyway.
Step 4: Update licenses, permits and accounts
| Registration | Action required |
|---|---|
| Florida sales tax permit | Re-register under new LLC |
| Local business tax receipt | Re-apply under LLC name |
| Professional licenses | Update or transfer |
| Zoning permits | Update business name |
| IRS | Use new EIN going forward |
| DOT number (if applicable) | Update to LLC |
| Industry-specific licenses | Transfer or reapply |
Operating under old licenses can cause compliance problems, so do these early.
Then the accounts: credit cards, merchant processing, PayPal or Stripe, and your accounting software. Ask your insurer to make the LLC the named insured on general liability, transfer professional liability coverage, and update property and auto coverage for anything you moved. Vendors need a new W-9 with the new EIN, and customers need the new name and any new payment instructions.
Step 5: Close out the sole proprietorship
File a final Schedule C with your personal return covering income and expenses through the conversion date. Cancel your fictitious name registration if you had one, along with any licenses tied to the sole proprietorship.
From the conversion date forward, a single-member LLC still reports on Schedule C. It’s a disregarded entity by default, so you pay self-employment tax on the profits just as before.
Should you elect S corp status?
Maybe, once the profits justify it. After forming the LLC, you can file Form 2553 with the IRS to be taxed as an S corp. You then pay yourself “reasonable compensation” through payroll, and profits above that salary aren’t subject to self-employment tax (15.3% savings on the excess). It generally makes sense once profits exceed $50,000-$60,000 a year.
Frequently asked questions
Will my credit history transfer?
No. Business credit doesn’t transfer automatically. The LLC is a new entity and builds its own history.
Can I convert to a multi-member LLC?
Yes. With partners, the LLC is taxed as a partnership instead of a disregarded entity.
How long does the whole process take?
The LLC forms in 2-3 days. Plan on 30-45 days to fully move the business over.
Start your Florida LLC
IncCraft forms your Florida LLC for $0 plus the $125 state filing fee, with registered agent service, an operating agreement and EIN filing assistance included.
Form your Florida LLC with IncCraft today.