Whether you’re re-branding or starting from scratch, giving your business a full overhaul might be in order. Here’s what to consider:
Can I create a new business within my current LLC?
Yes. You can add a new business function to an already existing LLC. To create some separation between products or brands, many LLC owners obtain a DBA for their new business venture. For example, if you own a shoe store (“Snazzy Shoes LLC,” say) but want to start start selling sunglasses on the side (as “Snazzy Sunglasses”), you can create a DBA name for your side business. Technically, both businesses will be filed under Snazzy Shoes LLC, but you can market your line of sunglasses under your DBA name.
Alternatively, if maintaining limited liability is one of your concerns, you could create a new LLC for your new business venture, but house it under your current LLC. In this case, your current LLC would end up being the sole owner (or member) of your newly formed LLC.
You can read more about expanding your business at Northwest’s blog: Can I Operate Two Businesses Under One LLC?
Can I overhaul my business but keep my LLC?
If the purpose of your business changes entirely, it might affect your filing with the state and/or your internal records. At minimum, you’ll need to check the following documents:
- Articles of Organization – Some states ask LLCs to list a “purpose” in their articles of organization, while others require a “purpose” AND a NAICS code. If any of the information you originally provided to the secretary of state changes when your business operations change, you’ll need to update your articles of organization by filing LLC Articles of Amendment.
- LLC Operating Agreement – Though an internal document, your LLC operating agreement is a legally recognized document and must be amended if your new business operations contradict it in any way. The process for amending your operating agreement should be specified in the operating agreement itself.
In some cases, you may want to start a new LLC from scratch. To figure out the best route for your business, you may want to consult with a business attorney.
Do I need a new EIN if my business changes?
It depends on how your business changes, and whether it affects your tax situation. For example, if your business expands and you bring in new partners (effectively turning a single-member LLC into a multi-member LLC), your business will be taxed as a partnership instead of a sole proprietorship. In this case, you WILL need a new EIN. However, if your business moves locations, changes its name, or adds new branches, you will NOT need a new EIN—but you might have to contact the IRS to update your file.
Still have questions? You might want to speak with a CPA. Otherwise, the IRS provides a handy breakdown of scenarios in which a new EIN is required.