Your LLC Survival Guide for 2025

The fix every business owner needs: Links to all our articles for the past six months.

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Braden Fiveash: Publisher
August 17, 2025

Good Morning!

  1. Feature: Your LLC Survival Guide for 2025

  2. Dear TCoL: How do I Convert my Florida S Corporation to an LLC?

Sunday has arrived. Reflect, reset, and get ready for what’s next.

-TCoL

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Dear TCoL: How do I Convert my Florida S Corporation to an LLC?

Question: Hello. I am an independent contractor and provide consulting services for my clients in the insurance industry. My S Corp is FL based and I am the sole owner. My son and wife also work part time for me. I want to convert my existing S Corp to an LLC and keep my existing Fed ID, bank accounts, etc. I read online that it's possible to do but I want to make sure it gets done correctly.

Simplicity and reduced cost are the main reasons. As a small independent contractor it will be much simpler and easier to file taxes and if I am correct there is better coverage of personal liability with an LLC. I am the sole owner now and will still be after the conversion. Lastly, the S Corp does not have any assets that have appreciated. The only assets that existed are liquid (bank account).

Any help or suggestions would be greatly appreciated!

Answer: Great question. So, I think we should break the answer down into factors to consider before you do a conversion and then the mechanics of a conversion.

Basic factors to consider

First, check the tax position of your current S corporation. If the corporation owns appreciated assets, converting could trigger capital gains tax. If there are no appreciated assets like you stated, you avoid that concern.

Next, review your contracts. Many agreements contain anti-assignment or change-of-control clauses. Those may still require notice or consent from clients. If your corporation holds certifications such as veteran-owned, woman-owned, or minority-owned status, verify whether those carry over. Some certifying agencies require a new filing when the legal form changes.

Think about self-employment taxes. As an S corp, you likely already pay payroll tax on reasonable wages while distributions escape self-employment tax. If you want to preserve that treatment, the LLC should elect S corp taxation. If you let the LLC default to partnership or disregarded status, more income may be subject to self-employment tax. Your CPA can run a simple cost–benefit analysis to show the tradeoffs.

Finally, consider the Employer Identification Number. The IRS should allow you to keep your EIN if the LLC continues as an S corporation. In tax terms, that is a “mere change in form,” an F reorganization under IRC §368(a)(1)(F). If you change the LLC’s classification to partnership or disregarded entity, the IRS will likely treat that as a liquidation and require a new EIN. If keeping the EIN is critical for banking, payroll, or licenses, plan to keep S status.

The conversion process

  1. Write a plan. Florida law requires a written Plan of Conversion. It must state the new LLC name, explain how shares convert to membership interests, and attach the LLC’s governing rules. An attorney should help you draft the Plan.

  2. Approve the plan. Directors adopt the plan. Shareholders approve it. Sole owners can sign both consents. Florida permits written consent in lieu of a meeting.

  3. File with Florida. Submit Articles of Conversion for the corporation and attach Articles of Organization for the LLC. Filing fee: $150. File online through Sunbiz.

  4. Effect of conversion. Once filed, the LLC is the same entity with continuous existence. Assets, contracts, debts, and pending actions should remain intact.

  5. Federal tax status and EIN. To keep your EIN, continue as an S corporation. This qualifies as an F reorganization under federal tax law, and your tax attributes and EIN continue. If you switch to partnership or disregarded taxation, the IRS treats it as a liquidation, requiring a new EIN and possibly triggering tax.

  6. Notify others. Report the name change on your next Form 1120-S. File Form 8822-B if your address or responsible party changes. Most banks and agencies will accept your Articles of Conversion and update their records, allowing you to keep existing accounts.

Final thoughts

Florida law makes conversion relatively straightforward, and the IRS should permit you to keep your EIN if you remain an S corporation for tax purposes after conversion. Still, this is a complex process. Every situation is different, especially if contracts, certifications, or appreciated assets are involved.

You should review your plans with your CPA and a licensed Florida attorney experienced in conversions. This outline should help you explain your goals and formulate questions for them.

If you want help finding the right attorney, email us at [email protected] and we will try to connect you.

Have an interesting business question and need a free bit of advice? Send your question to [email protected]. No confidential info, please!