Stripe has become one of the most trusted online payment processors for entrepreneurs, freelancers, and startups. Whether you’re selling digital products, running a subscription service, or managing an e-commerce business, Stripe offers a range of tools to help you receive payments with ease. When you first register for a Stripe account, many users begin as individuals or sole proprietors. However, as your business grows, transitioning to a more formal legal structure like an LLC (Limited Liability Company) can bring legal, financial, and tax-related advantages.
One common question among business owners is: “Can I change my Stripe account from individual to LLC?” The answer is yes, and this article will walk you through the process, including what to consider before you make that change.
Understanding the Difference Between Individual and LLC Accounts on Stripe
Before diving into the details of how to make the switch, it’s essential to understand what differentiates an individual account from an LLC account on Stripe.
- Individual Account: Registered under your personal name and Social Security Number (SSN). Suitable for freelancers or side hustlers just starting out.
- LLC Account: Registered under your business name and tax identification number (EIN). Ideal for growing businesses and entrepreneurs seeking liability protection.
Operating under an LLC structure allows for limited liability protection, potentially lower taxes, greater credibility, and easier access to funding. From a Stripe perspective, this simply means you are managing your payment streams under a legally recognized business name instead of your personal identity.
Before You Make the Change
There are several factors to consider before changing your Stripe account from individual to LLC:
- Form your LLC: You’ll need to officially form your LLC in your state before updating anything in Stripe. This process usually involves registering with your state’s business entity office and paying a filing fee.
- Obtain an EIN: The IRS issues EINs to identify businesses for tax purposes. You can apply for one online for free.
- Update business banking details: Your Stripe payouts will now go to a business account under your LLC name instead of your personal account.
Make sure that all legal documents are in order and consistent. Discrepancies between your legal business name, EIN, and other documentation could create delays in Stripe onboarding or lead to account restrictions.
How to Change Your Stripe Account from Individual to LLC
Changing your entity type on Stripe isn’t as simple as flipping a switch. Stripe takes compliance and verification seriously, so you’ll need to follow precise steps to ensure everything relays accurately in their system. Here’s how:
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Contact Stripe Support:
Start by reaching out to Stripe through their support center. Request a change of business structure from Individual to LLC. Stripe may not allow all information to be edited directly from your dashboard, so support is crucial in assisting the transition. -
Provide New Business Information:
You’ll need to submit updated business details, including:- Legal business name
- Employer Identification Number (EIN)
- Business address
- Updated banking information (linked to your business account)
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Upload Verification Documents:
Stripe will request documentation that proves the legitimacy of your LLC. This could include:- Articles of Organization
- IRS-issued EIN confirmation letter (Form CP 575)
- Operating Agreement (if applicable)
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Wait for Review:
Once submitted, Stripe’s compliance team will review the documents and changes. This may take a few days. During this period, your payouts won’t be affected if your account is in good standing.
In some cases, Stripe may suggest creating a new account under your LLC and then transitioning operations to that account, especially if there is a significant change in the business structure. While this may require some additional setup, including reconnecting with any third-party integrations (like Shopify or Squarespace), it can be a fresh and clean way to re-establish your business identity under your new LLC.
Things to Consider When Making the Change
Switching your account structure is more than just a profile update. Here are key points you should keep in mind:
- Impact on Payment History: Depending on how significant your account change is, Stripe may not be able to carry over your entire processing history to the new entity. If you switch to a new account, your previous transaction data might not transfer.
- Integration Updates: Third-party apps or platforms you’re using may be tied to your current Stripe account. Transitioning to an LLC might require reconfiguration or authentication with your platforms.
- Tax Reporting: Your 1099-K reporting will switch from SSN to EIN. Make sure your account is fully up to date before the end of the tax year to avoid confusion.
- Fees & Pricing: The fees for LLCs and individuals are typically the same. However, you may be eligible for additional Stripe features and support once your business structure is formalized.
A Smart Move for Growing Businesses
Changing your Stripe account from individual to LLC status is a wise move for entrepreneurs looking to grow sustainably and protect themselves legally. Operating under an LLC can help shield your personal assets from business liability, present a more professional image to customers and vendors, and offer better tax treatment in certain situations.
Stripe supports this type of transition, though it may require coordination through their support channels to ensure everything is handled accurately. The company prioritizes regulatory compliance and fraud prevention, so be prepared for document requests and a short review period.
Tips for a Smooth Transition
- Keep Documentation Handy: Have PDFs or scans of your business filings available before contacting Stripe.
- Use a Business Email: Update your email address on your Stripe profile to match your LLC’s domain if applicable. It shows professionalism and can ease document verification.
- Maintain Accurate Bank Records: Ensure that the bank account linked with Stripe matches the name of your LLC. Mismatches can lead to payout issues.
- Communicate with Clients and Platforms: Let your clients or connected platforms know about the switch to minimize disruptions.
Business transitions like these can feel overwhelming, but with proper planning and clear communication with Stripe support, you can complete the change without affecting your payment systems or client experience.
Final Thoughts
Yes, you can change your Stripe account from individual to LLC. The process may require a few extra steps and some back-and-forth with Stripe’s support team, but it’s entirely doable and often beneficial. As your business evolves, formalizing your structure with an LLC and updating your Stripe account accordingly is a responsible and forward-thinking decision.
Keep in mind that this is not just a technical update—it is a legal and operational one as well. Take the time to do it right, collect the necessary documents, and work closely with Stripe’s customer support to ensure a seamless transition. Once completed, you will be better positioned to scale your operations, take on larger clients, and enjoy greater peace of mind moving forward.
