Small Firm Exchange

So far accounting reasons, I'm changing from a pc to a sole proprietorship effective 1/1/22.  Issue is how to handle contracts and invoicing for projects that overlap.  I've in the process of closing the pc and have started to bill under the sole proprietorship.  The client is asking if they need a new contract, or an amended contract or some other type of paperwork.  Just looking for any suggestions on how to handle.  And I don't want to keep billing under the pc as I don't want to show any income for the pc in 2022.  Appreciate any guidance,

Larry


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Larry Goldberg AIA
lg+a architects, pc
Matawan NJ
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In the past, I have worked at firms that had to "novate" contracts. This essentially allows you to replace one entity in a contract with a new entity. But check with your attorney to find out what the requirements are in your state.

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Stephen M. Black, AIA
fi architecture, inc.
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We switched from an Inc to an LLC a few years back and were advised by the lawyers and CPAs to keep the existing contracts under the Inc and have all the new contracts under the LLC.  This means you have to keep two sets of books until all your existing contracts are closed out but it made the transition clean.  I know the overlap isn't clean on paper and honestly a bit of pain but that was how we were advised and how we did it.

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Daniel Shaffer, AIA
CMSA, Scholz, Oswald & Shaffer LLC
Sarasota FL
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Dont worry about it. I have been a Sole Proprietor since ’88. I believe that whatever you are at the end of the year is what the IRS cares about.
Check with a good CPA. NN

I think a simple contract amendment changing the entity should be all that you need.

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Betsy Nickless
SDA-Orange County Chapter
Newport Beach CA
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