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Conversion

By IncNow | Published October 8, 2013

A conversion is when a corporation changes to an LLC, or an LLC changes to a corporation. This is done by filing certain documents (Certificate of Conversion or Articles of Conversion) with the state, depending on the state and which business entity is being converted to. A Certificate of Conversion is often used like a short-form merger. Historically the out of state entity would have to form a new company in the state it wanted to move its domicile and then convert into it. Reincorporating and transferring assets would not work because that would result in a new entity and the history would be lost. A conversion preserves the ongoing operations. If leaving a state and moving a corporate domicile to Delaware to take advantage of the laws in Delaware, it is also important to file a document with the first state of incorporation to let them know the company has moved and to where it has moved and the new name of the company. If a company moves its domicile from one country to anther it is called a domestication.

When deciding where to form your company, consider that Delaware has advantages over your home state that may benefit you. Go