At some point during its lifespan, every business will undergo a change.
Changing your business – Obligations across a business license portfolio
Whether as small as a move to a new office location, or as monumental as a complete conversion of entity structure, changing an aspect of your business will require you to notify the regulatory boards that govern your business' licenses and registrations, and in some cases will require new filings altogether. For large businesses with a wide range of services spread across numerous geographic areas, these 'change filings' can be a hefty project. It is important to understand the change event requirements of every governing body under which your business has liability.
Business entity conversion
So you're planning to convert your business from a limited partnership (LP) to a corporation (Inc). First, it is necessary to check with the secretary of your state of formation to determine whether such a conversion can be done with a conversion filing, or if the state requires the dissolution of the old entity and the formation of the new. Do you have employees? You will almost certainly need to obtain a new Federal Employer ID Number (FEIN) from the IRS. Any professional licenses held at the state and local level will need updating, whether this entails a simple letter to the governing board or an entirely new application for licensure. Similarly, state tax accounts (sales tax, payroll tax, etc.) will more than likely need to be re-registered. At the local level, most localities require applying for new business license accounts if a business' FEIN changes.
Change of ownership
A change in company ownership can have wide-reaching ripples to a license portfolio. Since most business licenses and registrations are held in both the name of the business and the name of the owner(s), ensuring that your licenses reflect the correct information in this regard is a legal necessity. While some authorities require brand new applications for licensure in the event of an ownership change, most require the disclosure of new company ownership via specific 'Change of Ownership' filings which can require background checks for new owners, fees, and recommitment to the rules that govern the license.
Change of qualifying professional
Many professional business licenses require the employment of an adequately licensed individual to 'qualify' that business; general contractor businesses must be qualified by a licensed individual builder, architecture firms must be qualified by a licensed individual architect, pharmacies must be qualified by a 'pharmacist-in-charge,' and so on. When the qualifying professional changes or leaves your business, your business license must be updated to reflect the change. This usually means submission of an application notifying the board of the removal of the old qualifying party and the designation of the new, in which the new individual's licensure is verified and their background assessed to confirm they meet the eligibility requirements to qualify the business.
Change of business name / DBA / address / staff
Changes to a business name or address will almost always require notifications or filings for every license and registration in a business license portfolio. Name changes usually begin with a secretary of state filing in your state of formation, followed by a notification filing with the IRS to update the FEIN. All business names require some sort of approval, but if your business is in a heavily-regulated industry like finance, insurance, or technical profession like architecture or engineering, your new business name may also need to be approved by the relevant professional licensing board before the name change can be accomplished. For less stringently regulated industries, official letters notifying the governing body and providing proof of the new business name may be required. Changes to a business address will certainly require updates to boards up and down your licensing portfolio. Many licensing authorities even require updates for mundane changes like the addition or removal of business officers or other staff members.
The CT Corporation advantage
CT Corporation has a team of industry experts devoted to understanding and effectuating change filings across license portfolios of any size quickly and comprehensively. Don't play the guessing game with your business' legal compliance liabilities. Get the assist from CT Corporation today! Contact us for a consultation.