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We have a Delaware LLC taxed as a partnership and we haven't put any capital into the entity but paid some expenses out of pocket. We've decided to scrap the business and are considered dissolving the entity. I've decided that I may want to do it on my own instead on a small scale. I'm wondering if I can change the LLC election from taxed as a partnership to a corporation and also change the name of the business. Does this make sense from a tax standpoint or should I just dissolve the entity and open a new one?
ANSWER
Expert Todd Alexander's Answer:
The "cleanest" way is to dissolve the entity and create a new entity. This not only from a tax standpoint, but also liability and ownership showing that this is clearly separate from the previously created and dissolved partnership.
