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Separate a company file when the business structure and EIN change

An entity change happens when the changes on a business structure affects legal protection, tax savings and ownership requirements.

The most common business entity changes can be classified as:

  • Sole Proprietorship to Corporation
  • Sole Proprietor to Partnership
  • Partnership to Corporation
  • Corporation changing to S-Corp (or C-Corp)
  • Formation of a Limited Liability Corporation (LLC) or Incorporating
  • Change or Transfer of Ownership
  • Merger or Acquisition
  • Formal Business Name Change or modification


This article allows you to mark the change in business entity by splitting the file based on the date the change occurred. This process allows you to have all necessary data separated by entity at the time of change. Thus, make filing taxes for each entity more manageable.

Detailed instructions

Step 1: Create a backup of the company file.

 

Step 2: Restore the backup on a New Folder

  1. Create a new folder on your desktop.
  2. From File menu, choose Open or Restore Company.
  3. Select Restore a backup copy and click Next.
  4. Select Local backup and click Next.
  5. Browse to the backup that you created on step 1. Select the file and click Open.
  6. Click Next. Browse to the new folder that you created on you desktop.
  7. Add the number "1" in between the file name and .QBW. Click Save.
    Note: You may not see .QBW on the screen if your computer is set to Hide extensions for known file types.
    If that is the case, just add "1" at the end of the file name.
  8. Repeat steps a-f and add "2" between the file name and .QBW.
  9. Click Save.

 

Step 3: Condense company file "1" to the structure ending date.

  1. Open company file "1".
  2. Once company file "1" is open, from File menu, select Utilities and click Condense Data.
  3. Select Transaction outside of date range. Enter the company start date and date for ending structure and click Next.
  4. Select Don't create summary and click Next.
  5. Click Select None and click Next
  6. Click Begin Condense. Once Condense is complete, click OK

 

Step 4: Condense file "2"

  1. Open company file "2".
  2. Once company file "2" is open, from File menu, select Utilities and click Condense Data.
  3. Select Transaction before a specific date. Enter the starting date of the new structure and click Next.
  4. Select Don't create a summary and click Next.
  5. Click Select None and click Next.
  6. Click Begin Condense. Once Condense is complete, click OK

 

Step 5: Update structure information in file "2"

  1. From Company menu, select My Company.
  2. Click the pencil icon to pull up Company Information window.
  3. Browse through the tabs and make sure to update necessary information for the new business structure.

 

KB ID# HOW19766
12/7/2016 8:01:09 PM
QYPPRDQBKSWS09 9138 Pro 2017 b102bb