How to Transition From a Sole Proprietorship to a Separate Legal Entity

You started your business with one approach in your own name and now you have made the important step to form a separate legal entity. That is a huge step. The key is to complete the transition so your business will actually benefit from the advantages you gain by forming a separate legal entity.

Over the years, we have seen several mistakes in this transition and many times where someone is still operating their sole proprietorship at the same time as their new entity without knowing about it. We wanted to clear up the steps you must complete to make the transition.

Here are the steps:

  1. Form the separate legal entity (an LLC or corporation). NCP can help you do that (we form corporation and LLCs in all 50 states).
  2. Obtain a NEW TAX ID Number. Even if you had a Tax ID number as a sole proprietorship you need a NEW ONE!
  3. Open a NEW bank account in the name of the entity. Yes, even if you already have a bank account and you went from “Marketing Solutions” to “Marketing Solutions, Inc.” that is a new name and a separate legal entity and you need a NEW bank account. Yes, new checks too!
  4. Connect the DBA (doing business as) to the new entity. When you filed the DBA in your local county you were the applicant. That is what make that business in your name. Now you need to “reconnect” the DBA to the NEW legal entity. That means you need to dissolve the DBA name linked to you and refile (the same day) the DBA name to the new entity. That means the new entity is the applicant. This is what connects it to the new entity. Now, for both tax and liability issues any business in the DBA from this point forward is under the new entity name.
  5. Obtain a new business license in the name of the new entity. Yes, a new one. Typically, you can NOT transfer a business license from your sole proprietorship name to your new LLC. Reason? It is a separate legal entity.
  6. Obtain a business credit card in the name of the new entity. Stop using your personal credit card cards to finance your business. Ask the bank how long does the new entity have to be in business before they would recommend you apply for a business credit card.
  7. Update all your sources of income with the new Tax ID number of the new entity. You goal is to avoid receiving unnecessary 1099s (meaning you want the money, just not to yourself individually anymore) for affiliate or referral fees by the end of next year. Make sure all your affiliates are updated with the new entity information.
  8. Update any contracts in the name of the new entity.
  9. Update vendors with your new entity name and information.
  10. Get new business cards. Don’t be cheap even if the only difference of the name of your company is “LLC”.
  11. Set up a new chart of accounts in the new entity name.
  12. Update your merchant account provider with the new entity information. You may have to complete new forms.
  13. Update your insurance provider with the new entity information.
  14. Comply and update any state related issues in the name of the new entity.
  15. Check with your attorney or CPA for any steps missed.

This is a good list to help you get started. The biggest mistake we see is not completing updating the DBA name from your name to the new entity and using the new bank account. The goal is to get off the sole proprietorship track as fast as possible. If you add new businesses in the future you can add a new DBA name with the entity as the applicant. The key part is to be aware of the type of asset class. Safe assets like gold, investments should be owned by a separate legal entity from your operating business. Real estate should be in a separate legal entity also. If you have several properties each with a lot of equity it may make sense to split those into separate legal entities.

Currently a sole proprietorship and looking to make the transition to a separate legal entity? Call NCP at 1-888-627-7007 and we will take you through the entire process and process additional support tools including checklists, webinars… to make this a seamless process for you!

Where to Get a Blank Family Tree Chart, Plus 7 Genealogy Tips

If you’re looking for a blank family tree chart, you’ve come to the right place. The link below will take you to my website where you can download a simple four generation chart in PDF format for free.

After you do that, here are some important tips to help you fill it out correctly.

First off, in genealogy, a family is defined as a father, a mother and their children. The mother and father don’t have to be married to each other; they don’t even have to live under the same roof.

This “family” concept is the most comprehensive way of keeping track of any particular blood line, encompassing all children born between two particular people; right or wrong, legal or illegal, moral or not. What matters is the bloodline of each individual on your family tree and how they relate to you.

Genealogy Tip #1

It is easier to keep up than catch up.

Document everything. Yes, it is time consuming but not nearly as time consuming as having to re-research something you already spent hours on just because you forgot to get the page number. Do it right the first time and it will only take seconds as opposed to hours.

On your first blank family tree chart – also called a pedigree chart – you’ll need to fill in the Chart Number – which is 1. Then fill in “Pedigree Chart for (Your Name) who is person #1 on chart #1.”

Genealogy Tip #2

Start with yourself. No one knows you like you do. Or do they? After getting bit by the genealogy bug, some folks have learned that they were adopted or the man they thought was their dad was not. In my husband’s case, he was only the second generation to bear his particular last name, the original simplified courtesy of Ellis Island when his family emigrated from Holland.

On the far left of the blank family tree chart, in the first slot, write “#1,” and then PRINT the name that you were born with. As you progress into your research you will discover that many people have illegible handwriting and you will love those dear souls who printed. Handwriting has changed much in the last 200 years and there will be more changes in the next 200 years. Have mercy on your great great grandchildren who will be the keeper of this family tree you are starting. Some genealogists prefer to print the surname (last name) in capital letters.

Genealogy Tip #3

When you start to grow your family tree, it’s not only what you know about yourself, but what you can prove. Do you have your birth certificate? If so, extract the information that is found there. If you have an official state document, you can consider this “confirmed” or “documented” information. Make a copy of it and keep it with your pedigree chart. Do not keep any original documents in the family tree files that you take out of your home when you’re off doing research.

Over the years, genealogists have struggled with a consistent way to write dates. Slowly convention has evolved to the 2/3/4 formula: DAY (two digits) MONTH (three letter abbreviation) YEAR (four digits). The three letter abbreviations for the months are always the first three letters of any particular month. EXAMPLE: 31 MAR 1841.

In the space provided on your blank family tree chart, write down the date you were born: DAY MONTH YEAR.

Genealogy Tip #4

Before you record your birth place, there’s another rule to learn. When documenting any data, from dates to places, genealogists think: small, medium, large. A day is smaller than a month; a month is smaller than a year.

The same rule holds true for location. Village, town or city first. Follow that with the county if you know it. Then the state and country. Small to large. Example: Ann Arbor, Washtenaw, Michigan, USA.

Genealogy Tip #5

Our generation is not the first generation to marry multiple times, and as a genealogist one shouldn’t pass judgment on Great Granny Dupont who married seven times — once to a first cousin and once to her mother’s sister’s widowed husband. If you are currently married, or widowed, fill in the date that you married and where. Fill in the name of your spouse: first, middle and the last name that they were born with.

If you’ve been married multiple times and have had children with other spouses, print another blank family tree chart for each marriage and fill it in with identical information EXCEPT for marriage/spouse information. Label it Chart Number 1B (Spouse #2), 1C (Spouse #3), 1D (Spouse #4) and so on. Put the most current chart on top, this should be Chart # 1, and staple the rest together underneath. You’ll get to them later.

Genealogy Tip #6

Most blank family tree charts are filled in left to right.

So, take a step to the right and begin filling in the slot representing your parents, just like you did for yourself. On the topmost line, write #2 and your father’s information. #3 is for your mother. Remember that when filling in a chart, the males are always on top, with the “distaff side” (females), beneath. Apparently the “missionary position” has always dictated a woman’s place in history. Also, other than YOURSELF who is #1, the males will always be even numbers and the females will always be the odd numbers.

Genealogy Tip #7

Many genealogists enter information onto their charts in pencil. This is called “The Working Chart.” When they are certain that all information for that person is correct and documented, they reenter it into a new, clean chart in pen.

5 Creative Ideas for Enhancing Flip Charts

Whether you are a trainer, facilitator, educator or manager, flip charts (flipcharts) are an inexpensive and effective tool to help make your ideas visual, display information or exchange ideas in a training session or meeting. While there are various other tools that can also accomplish these goals, flip charts continue to be one of the easiest and most versatile ways to communicate information in an adult learning classroom or office.

Here are five simple and creative ideas for enhancing your flip chart pages:

1. Include Colored Icons or Bullets in various shapes that relate to your topic in order to visually tie to written text and your program or meeting theme. For example when addressing the following topics:

-Telephone skills – use small telephone handsets or headsets;

-Customer service skills – use small smile faces or faces with various expressions based on your text;

-Travel related – use carts, boats, airplanes ships or other modes of transportation.

-EEO or legal – use justice scales; and

-Technical skills – use computers or other appropriate equipment.

2. Incorporate Applicable Drawn Images in various colors. Cartoon characters, caricatures, simple stick figures, and similar representations are great. If you are using a Windows-based computer or laptop, you can insert some of these by going to the Microsoft Word toolbar and clicking “Insert,” then “Picture” or “Clip Art” to choose appropriate images.

If you cannot draw well, and have an opaque projector (inexpensive versions can be purchased at arts and crafts stores, such as Michael’s or Hobby Lobby and online). You simply project an image onto a flip chart page and trace it. You can also create a PowerPoint slide and project that onto paper for tracing.

An important thing to remember when using images is that you must get permission and cite copyright owners when using material that you do not develop yourself in order to limit legal liability.

3. Use Colored Shapes to Set Key Terms and Titles Apart. This will help differentiate them from other words on the page. For example, you might use clouds, stars, circles, bursting bombs, or geometric shapes drawn in various colors to highlight a concept, word or phrase.

4. Attach Key Concepts Written on Cut Out Shapes that you attach to the page with masking tape, Velcro, or artists adhesive on the back of each shape. For example, “bright ideas” might be elicited from participants and written on lightbulb shaped cutouts in a variety of colors. Learners could then come up and post their idea on a flip chart page and explain their thinking about it. That page could then be posted on the wall for reference later and viewing by learners during breaks.

5. Add Borders to Flip Chart Pages with either colored markers or colored masking tape. You can now buy tape at office supply and craft stores in a variety of widths and colors, and with various graphic images. Try to tie to program themes. For example, if you are doing a session on customer service or selling in a specific country, choose colors from that country’s flag or images that relate for your borders.

RAL Colour Charts

RAL Colour Charts are ideal for use in reference to choose a suitable colour for painting using powder coat colours although other tools such as RAL Colour Swabs and RAL Colour Control Cards are often more useful.

A RAL Colour Chart is ideal for hanging on the wall for general reference and for use when discussing power coating colours over the phone. However, they are not ideal for use in the workshop, especially if they are pinned to the wall. This is where RAL Colour Swabs and Control Cards come in.

A RAL Shade Swab is a fan of colour coated plastic with each fan detailing a different RAL Tone & Colour. This fan is ideal for use in the work shop as well as off site and at a customers factory when discussing important powder coating decisions. The RAL Shade Swab can be placed on an item to give a more accurate representation of the intended finished powder coating to me applied to the metal component. Most Swabs have several hundred colours on them offering a complete range of colours, shades and tones available as powder coated finishes, and the RAL Swab will help to determine the preffered choice of powder coated finish.

However, the limitations of the RAL Shade & Colour Swabs are almost as tight as those of the RAL Tone Charts pinned to the office wall. The small Swab tabs which are generally only 100mm long and 40mm wide do not offer an exact colour match, only a close representation. This is where a RAL Colour Control Card comes into play.

The Colour Control Card is a large specially prepared colour coated card prepared by the paint manufacturer. powder coating Colour Cards offer a perfect match against the manufacturers paint and can be kept as reference for later colour matching exercises. RAL Coating Cards are suitable for permanent colour references for technical documentation as well as legal contract referencing. Whilst all colours might vary slightly due to changing powder coating environments and respective curing regimes, the RAL Shade & Colour Card is considered the definitive reference for paint matching against RAL Powder Coating Colours.

Common colours include:

-green beige
-sulfur yellow
-vermilion
-signal orange
-orient red
-signal violet
-olive green
-emerald green
-traffic green
-squirrel grey
-tarpaulin grey
-graphite grey
-saffron yellow
-ultramarine blue
-papyrus white
-copper brown
-clay brown
-yellow grey
-turquoise blue
-high reflective green
-heather violet
-red lilac
-orient red
-raspberry red
-tomato red

Ral Colour Swabs are available in the K7 format which shows 5 colours per fan finger, and as such is a cheaper fan type as well as the K5 which has more fan fingers each of which is dedicated to a single RAL tone, shade or colour.