Can a firm file an update online to notify NFA that it has changed its form of organization?

It depends.  In most instances, firms may notify NFA of a change in form of organization by filing an Update. If a firm reports a change in the form of organization by filing an Update, the newly formed organization will be liable for all obligations of the pre-existing organization. 

If the reorganized firm does not want to be liable for the obligations of the prior firm, it must apply for a new registration.  Firms changing to or from a sole proprietorship must also apply for a new registration.  In these instances, the firm needs to file an electronic application (Form 7-R) for the newly formed organization and a Firm Withdrawal Request (Form 7-W) for the pre-existing organization.