Building Credit SP vs inc/LLC
09-14-2012 09:35 PM
If one builds credit in/as a sole proprietorship can that credit be useful if one wishes to later incorporate?
I ask because I have a chance to build a sole proprietorship (as a consultant) with a specific vendor on a part time basis. I am fairly content that the income stream is secure. Occasionally I can see this having business costs (paper, pens, computers and such) I wondered about the pros/cons of trying to build business credit as a sole proprietor. I expect that all the costs would be less than what I'd be earning so I am grudgingly ok with opening a card with a personal guarantee. I just want to know if I could later use that (hopefully) good credit history when I later try to open a small LLC/Inc employing a few people that may have a less secure income stream. I was told that if one is making a 1 person LLC it's possible to keep the same EIN #. My dreams are a bit bigger than just 1 person though.
Re: Building Credit SP vs inc/LLC
09-16-2012 07:01 PM
You will need a new EIN if you incorporate as it is a seperate entity from the business you had as a sole proprietor. Not certain about creating an LLC but I don't think you would need a new one.