Delaware LLC Certificate of Conversion
Delaware has long been considered one of the most pro-business states. A limited liability company formed in another state can take advantage of Delaware’s business-friendly laws by becoming a Delaware LLC. The legal procedure that changes an LLC’s legal home state to Delaware is called a Delaware LLC conversion.
A Delaware LLC conversion is a multi-step process that allows an out-of-state LLC (a foreign LLC) to move to Delaware. An LLC that completes a conversion to Delaware must prepare several conversion documents. The main document the LLC files in Delaware is called a Delaware certificate of conversion.
What is a Delaware LLC Certificate of Conversion?
An out-of-state LLC that changes its legal home (called its state of formation or domicile) to Delaware via an LLC conversion must file legal documents in its current state and in Delaware. The document filed in Delaware is called a Delaware certificate of conversion.1 The Delaware Division of Corporations publishes a certificate of conversion form that an LLC must complete and file when converting into Delaware.2 There are numerous other Delaware certificate of conversion forms for different types of conversions, so it is important to select the correct form.
What Information Must a Delaware Certificate of Conversion Include?
A converting LLC’s Delaware certificate of conversion states:
- The date when the LLC was originally formed;
- The state where the LLC was originally formed;
- The LLC’s name and domicile state immediately prior to the conversion; and
- The name the LLC will use in Delaware.3
The converting LLC must also submit a new Delaware certificate of formation—the document that forms a Delaware LLC—along with the certificate of conversion.4 The certificate of formation need only state the LLC’s name, office address, and Delaware registered agent for service.5 In some states, an LLC’s domestication document and formation document are combined into a single form. Delaware requires two separate forms.
Other Names for a Certificate of Conversion
Most states have laws that authorize a legal procedure for changing an LLC’s legal home state. In some states, the process is called an LLC domestication. In others (like Delaware), it is called an LLC conversion.6
States that authorize LLC conversions and domestications all require the company to file an official document with the state filing office (usually the secretary of state). The Delaware LLC conversion document is called a certificate of conversion. There are several other names used in other states for the document an LLC files when transferring to a new state—including:
- Articles of conversion;
- Statement of conversion;
- Articles of domestication;
- Certificate of domestication; or
- Statement of domestication.
A converting LLC sometimes files different documents with the same title in each state. For example, an LLC that transfers from California to Delaware files a California certificate of conversion and a Delaware certificate of conversion. The document names may also be different. An LLC that moves from Virginia to Delaware files a Virginia articles of domestication and a Delaware certificate of conversion. It is important that each conversion document comply with the laws of the state where it is filed.
Filing the Delaware Certificate of Conversion
The converting LLC completes and signs the Delaware certificate of conversion and certificate of formation and files both documents with the Delaware Division of Corporations.7 The Division of Corporations also has a filing cover sheet that it asks filers to include with business filings.
The LLC can file the Delaware certificate of conversion with the Division of Corporations by mail, or registered users can upload the document for filing through the Division of Corporations’ website. The filing cover sheet is unnecessary when uploading the documents online.
The total filing fee for an out-of-state LLC converting to Delaware is $290.00—which is composed of a $200.00 fee for the certificate of conversion and a $90.00 fee for the certificate of formation.8 The fee for transferring a Delaware LLC to another state is $250.00. Filers can request expedited filing for an additional fee.
When is a Delaware Certificate of Conversion Effective?
An LLC certificate of conversion to Delaware is ordinarily effective—and the company is legally a Delaware LLC—when the certificate of conversion and certificate of formation are filed and accepted by the Division of Corporations.9 Alternatively, a converting LLC can list a delayed effective date in the documents. Delaware allows a delayed effective date to be up to 180 days after filing.10
It is important to coordinate the effective dates between the two states, as most states do not allow a filing’s effective date to be delayed as long as Delaware permits. An LLC that mixes up effective dates or has a problem with filing may inadvertently lose its limited liability status until the entire procedure is completed. This issue is easily avoided through proper planning.
Does a Delaware LLC Conversion Require any Other Steps?
An out-of-state LLC must complete multiple steps to convert into a Delaware LLC. Filing the Delaware certificate of conversion is an important part of the process but does not, by itself, transfer the out-of-state LLC to Delaware. A company must also complete each of the following steps to successfully become a Delaware LLC:
- Create a plan of conversion and approve the conversion in compliance with both Delaware law and the current state’s law;11
- Prepare the Delaware certificate of conversion and certificate of formation;
- Prepare the current state’s document that is equivalent to the certificate of conversion;
- Prepare and approve the LLC’s new operating agreement—which Delaware calls a company agreement—customized for the advantages of Delaware law;12
- File the Delaware certificate of conversion and certificate of formation with the Delaware Division of Corporations;
- File the current state’s equivalent document with the current state’s filing office (usually the secretary of state’s office); and
- Complete any additional steps required by the LLC’s governing documents or the current state’s law.
When the process is complete, the LLC becomes a Delaware LLC governed by Delaware law, but it is otherwise the same entity as it was before the conversion.13 This consistency avoids potential administrative confusion or interference with the business’s regular operations or contractual relationships.14 There are other ways to move an existing business to Delaware, but conversion is the most cost-effective and least expensive approach in most cases.
- Del. Code §18-214(c).
- See Certificate of Conversion from a Non-Delaware Limited Liability Company to a Delaware Limited Liability Company.
- Del. Code §18-214(c)(1 – 4).
- Del. Code §18-201(b).
- Del. Code §18-201(a).
- A Delaware LLC domestication is a procedure that moves a non-U.S. entity to Delaware. Del. Code §18-212.
- Del. Code §§ 18-214(b); 18-201(b).
- Del. Code §18-1105.
- Del. Code § 18-214(d).
- Del. Code §18-206(b).
- Del. Code §18-214(h).
- Del. Code §18-201(d).
- Del. Code § 18-214(g).
- Del. Code §§ 18-214(e) and (f).