California LLC Statement of Conversion
Last updated Jul 10, 2023 A California LLC conversion is the legal process for moving an LLC from another state into California or from California into another state.1 The document that California law requires an LLC to file in California when completing an LLC conversion is called a statement of conversion (converting into California) or a certificate of conversion (converting from California).2
An LLC conversion to California is a multi-step process. Filing a California statement of conversion is an essential step but is not all that is needed. An out-of-state LLC must complete the entire California LLC conversion process to successfully transfer to California.
The majority of states have a legal process for changing an LLC’s legal home state to a new state. Some states (like California) call the process an LLC conversion. Other states (like Arizona) use the name LLC domestication.
What is a California LLC Statement of Conversion?
Many states use the same name for the document an LLC files when converting into the state or from the state to another state. In California, there are two separate documents.
A California statement of conversion is one of several key conversion documents an out-of-state LLC creates when converting into a California LLC. The statement of conversion is filed with the California Secretary of State’s office and gives the office the information needed to process the conversion.3 The LLC cannot file the statement of conversion until after it has completed the earlier steps in the conversion process—such as preparing a California plan of conversion.
A converting out-of-state LLC must also file a California articles of organization—the document that officially establishes the LLC’s existence as a California LLC.4 Some states require LLCs to complete two separate forms when domesticating into the state. The California Secretary combines the two documents—the statement of conversion and the articles of organization—into a single form called Limited Liability Company Articles of Organization – Conversion (Form LLC-1A). After the completed and signed Form LLC-1A is filed and accepted, the statement of conversion and articles of organization serve as official public notice that the out-of-state LLC has converted into a California LLC.
What Information Must a Statement of Conversion Include?
California law requires a statement of conversion to provide information about the LLC and about the conversion.5 California law also lists the information that must be in an LLC’s articles of organization.6 The secretary of state’s Form LLC-1A combines both sets of requirements—stating:
- The name the LLC will use in California;
- That the California LLC’s purpose is to engage in any lawful act or activity under California law;
- The California LLC’s management structure (member-managed or manager-managed);
- The LLC’s initial street address in California and mailing address;
- The LLC’s California agent for services of process;
- The out-of-state LLC’s name, entity form, state, and California entity number (if any); and
- That the plan of conversion was properly approved and the percentage vote required for approval by each class of members.
Other Names for a Statement of Conversion
All states that authorize LLC domestications or conversions require the LLC to file a document describing the transfer with the secretary of state (or equivalent filing office). California calls the document a statement of conversion (if entering California) or a certificate of conversion (if leaving California). Other states have a variety of names for their equivalent documents—such as:
- Articles of conversion;
- Certificate of domestication;
- Certificate of conversion;
- Statement of domestication; or
- Articles of domestication.
How Does an LLC File its California Statement of Conversion?
An out-of-state LLC converting into California creates its statement of conversion by completing the California Secretary of State’s Form LLC-1A. The form must be signed by one or more persons with legal authority to act for the LLC—typically a member, manager, or authorized officer. The completed, signed form is then submitted to the California Secretary of State.
The secretary of state’s office accepts conversion filings by mail or hand-delivery. Users who have accounts with California’s bizfile system can also file online. The form must be submitted with the $70.00 filing fee and the California Secretary of State’s cover sheet (unless e-filed). There is an additional $15.00 handling fee for in-person submissions.
Does a California LLC Conversion Require any Other Steps?
Filing the California statement of conversion with the LLC’s new California articles of organization is, without more, insufficient to properly convert an out-of-state LLC to California. A converting LLC must complete a multi-step conversion process that includes several additional steps:
- Create and approve a plan of conversion that complies with both states’ laws;
- Complete and file the California Articles of Organization – Conversion (Form LLC-1A);
- Complete and file the current state’s articles of domestication or equivalent document;
- Complete any additional steps required by the LLC’s current state;
- Adopt the company’s new California operating agreement and a resolution authorizing the transaction.
An LLC that fails to properly perform the conversion process— for example, by not complying with both states’ laws—may find that its attempted conversion is ineffective. Although the LLC conversion process is relatively straightforward, errors can lead to administrative hassle or unnecessary risk exposure.
Why Would an LLC File a California Statement of Conversion?
LLC conversions and domestications can be a very helpful tool for business owners who move to a new state or simply want to take advantage of legal benefits offered by another state’s laws. The conversion process is an uncomplicated and inexpensive way to move an LLC to a new state. Conversion also significantly reduces the business’s administrative burden compared to other methods for changing an existing LLC’s state of formation—such as dissolving the LLC in its current state, forming a new California LLC, and transferring assets to the new company.
An out-of-state LLC that domesticates into California remains the same entity after the process is complete.7 It still has the same tax identity, assets and liabilities, and its contractual rights and obligations survive the transfer. The company simply becomes a California LLC governed by California law but otherwise continues business as usual.