Can I convert my existing partnership to an LLC?
Many people who decide to form an LLC already have an existing business that has been operated for several years as a partnership or sole proprietorship. Often owners of these businesses learn about LLCs and decide that they want to take advantage of the liability protection offered by the LLC.
Any partnership or sole proprietorship may easily convert into an LLC. In the case of an existing business converting to an LLC, the process is essentially the same. The owner of the sole proprietorship or the partners of the partnership form an LLC and begin operating their business under the new entity. As with all LLCs, it is important to transfer the assets that will be used in conjunction with the business to the LLC. For example, if the business is a lawn and landscape service the sole proprietorship or partnership should transfer the assets (lawn mowers, etc.) to the newly formed LLC. A simple bill of sale can accomplish this.
Finally, it is important that the owners of the existing business which will convert into an LLC terminate the old partnership or sole proprietorship. In Michigan, this usually can be done at the local county clerks office.