How to Move an LLC to Washington

There are many reasons why a business owner may want to move an LLC to Washington. This article discusses the use of conversion, known in some states as LLC domestication, to transfer an LLC to Washington.

What is Washington LLC Conversion?

Washington conversion is a legal process that allows an LLC to change its domicile—the state where the LLC is organized—to a new state.¹ An out-of-state (or foreign) LLC that completes a Washington LLC conversion becomes a Washington LLC governed by the Washington Limited Liability Company Act.² The company otherwise remains the same entity and simply continues its existence as a Washington LLC.³

Some states use the name domestication for the equivalent legal procedure for changing an LLC’s domicile. Washington uses domestication to describe a change in a nonprofit corporation’s domicile.⁴

Conversion—under Washington law—can also mean a change in an entity’s business type. For example, an LLC can convert to a corporation (or vice versa).⁵ This article focuses on conversions that change out-of-state LLCs into Washington LLCs. Other types of conversions authorized in Washington involve a similar process but have different purposes and requirements.

Why Transfer an LLC to Washington?

There are plenty of reasons—practical and commercial—for an LLC to change its state of domicile. A few of the more common motivations for Washington LLC conversions are:

• Networking and owner convenience. A business owner who relocates to Washington may prefer to locate the business in the new home state for simple convenience. An LLC owner who lives in Washington will more easily find nearby professionals familiar with Washington law. This makes it easier for the business to hire qualified attorneys and accountants. State agencies are also more likely to have local offices—allowing for in-person communication when necessary.
• Reducing reporting requirements and fees. Conversion can offer practical benefits like reducing an LLC’s annual filing fees and paperwork burden. An out-of-state LLC that does business in Washington may have to submit annual reports—and pay filing fees—in both states. If the LLC only does business in Washington, conversion could save time and money by lowering the number of filings.
• Advancing business objectives. Strategic plans can also justify relocation and conversion. A business owner might decide to move the business to Washington to be at the center of the LLC’s focus industry. For example, an LLC domiciled and physically located in Washington may enjoy a competitive advantage over out-of-state businesses if Washington is the heart of the company’s main industry.
• Changing to Washington law. Conversion might help achieve a company’s operational goals. A business that converts to Washington may improve its chance of success if Washington law is better for its business model or long-term strategy. A Washington LLC conversion might also make sense if the members want to adopt operating agreement provisions that Washington allows but the current state does not.

What are the Benefits of Washington LLC Conversion?

The conversion process is designed to avoid business disruption and make the official change easier. A business that converts to a Washington LLC changes its domicile but otherwise is mostly unaffected. These are some practical benefits of conversion—especially compared to other methods of changing a company’s domicile:

• The company keeps the same identity and EIN. An LLC is the same company before and after conversion.⁶ It does not change its Employer Identification Number (EIN) and remains the same taxpayer. Changing a business’s legal identity takes a lot of time and money, so avoiding a change is a true benefit.
• Conversion does not affect the LLC’s bank accounts or other assets. A converting LLC keeps its pre-conversion assets and property rights after conversion.⁷ A new Washington LLC need not open new bank accounts unless it wants to. Asset transfers are unnecessary.
• Business contracts remain effective. A post-conversion LLC is still a party to any pre-conversion contracts and keeps all of its contractual rights.⁸ There is no need to rewrite or re-sign contracts due to a conversion.
• Business operations continue uninterrupted. A converting LLC continues day-to-day business operations during and after conversion. There is not need for the business to shut down during the conversion and lose income. The business’s employees still work for the same entity, so there’s no need to re-hire.
• Dissolution in the current state is unnecessary. State LLC laws require a company that ends its existence to dissolve, wind up its affairs, and distribute company assets to members.⁹ A converting LLC officially leaves its current state but avoids the burden of formally terminating the business. The company must register as a foreign LLC in its current state only if it intends to continue doing business there.

What LLCs can Convert to Washington LLCs?

Washington LLC conversion is the best option for officially moving an out-of-state LLC to Washington in most cases. Unfortunately, conversion is not always possible. Business owners should consider the following issues when deciding whether a conversion to Washington is possible and sensible.

Whether the LLC’s Current State Allows Conversion

An LLC’s current state and the state where it wants to transfer must both allow conversion. That means an out-of-state LLC can convert to Washington only if its current state has a legal process for changing a company’s domicile.¹⁰ A law using the name domestication for the same process meets this condition for a Washington LLC conversion.

Whether the LLC’s Governing Documents Allow Conversion

An LLC’s governing documents control the LLC and define the members’ business relationships with the company and each other (among other things). Washington law calls an LLC’s governing documents the certificate of formation and the limited liability company agreement (or LLC agreement). Other states use the terms articles of organization and operating agreement.

Owners thinking of converting to Washington should make sure the LLC’s governing documents allow conversion before getting started. Washington does not require a converting LLC’s governing documents to expressly allow conversion, but other states sometimes do. An LLC may need to change its governing documents before converting—depending on what they say about conversion.

Whether Washington Allows LLCs to Do the Company’s Type of Business

An out-of-state LLC should only convert to Washington if Washington law lets LLCs conduct the company’s usual type of business. Washington’s LLC Act generally allows LLCs to pursue “any lawful purpose.”¹¹ An out-of-state LLC involved in a business that is legal in its current state—but not in Washington—should not change its domicile to Washington unless it intends to also change the type of business it does.

Some state laws prevent LLCs from offering some or all professional services. Washington authorizes professional LLCs–or PLLCs—which offer services that require licensing and are subject to legal requirements and limitations.¹² Professional companies considering a change of domicile to Washington should check all Washington licensing requirements before deciding to convert.

How Much Does Washington LLC Conversion Cost?

A business’s cost for an LLC conversion includes labor costs and filing fees—along with registered agent fees if the owners choose to hire a commercial registered agent. An out-of-state LLC converting to Washington should anticipate:

• Labor Costs. A converting LLC’s labor costs are amounts paid to the service provider that assists with the conversion. Necessary work includes information gathering, document preparation, communication with the owners and state agencies, and filing time. Actual labor costs vary between service providers.
• Filing Fees. The filing fees for conversion are the fees state agencies charge for filing the necessary documents. The Washington Secretary of State’s filing fee for converting an out-of-state LLC to Washington is $190.00.¹³ The amount covers the articles of conversion and certificate of formation. A converting LLC’s current state may charge a filing fee for documents filed by outgoing LLCs. For example, Washington requires a $10.00 filing fee when Washington LLCs convert to another state.
• Registered Agent Fees. Washington LLCs must maintain a registered agent authorized to accept service of process for the company.¹⁴ Washington lets LLCs appoint an officer associated with the company as registered agent.¹⁵ Commercial registered agents—which agree to serve as a company’s registered agent for a fee—promote consistency and convenience and avoid disclosure of member information. Commercial registered agents in Washington typically charge around $100.00 per year.

How Long Does Washington LLC Conversion Take?

The time it takes to complete a Washington LLC conversion varies between companies and transactions. The precise length of a conversion depends on:

• How long it takes the document preparer to gather information and prepare the documents;
• How long it takes members and managers to review the documents, give feedback (if necessary), and sign; and
• How long it takes the Washington secretary of state to process the documents.

What Laws Govern Washington LLC Conversion?

An out-of-state LLC considering a Washington LLC conversion must consider two states’ laws: Washington and the company’s current domicile state.¹⁶ The LLC’s governing documents also control the process to the extent they include relevant provisions.

Washington’s LLC conversion laws are described throughout this article. The company’s current state’s laws affect multiple aspects of the transaction, including

• Whether conversion is possible—an LLC domiciled in a state that does not allow conversion cannot convert to Washington;
• What issues the plan of conversion must address;
• How members and managers approve the plan of conversion;
• What documents the LLC files with the current state to complete the conversion; and
• Any additional conversion requirements of the current state’s LLC statute.¹⁷

What is the Washington LLC Conversion Process?

The Washington LLC conversion process consists of two components: document preparation and administrative tasks.

Document Preparation

A Washington LLC conversion must be carefully considered and planned. An LLC that decides to convert to Washington starts the process by preparing several documents—which must comply with both states’ laws and the LLC’s governing documents.¹⁸ Our domestication checklist provides further details about the general process for changing an LLC’s domicile to a new state.

• Plan of Conversion. A Plan of Conversion that is designed to comply with the requirements of both Washington law and the law of the state that the LLC is moving from.
• Washington Articles of Conversion. The Washington Articles of Conversion with all information and any related documents needed for filing with the Corporations Division of the Secretary of State.
• Conversion Document for Filing in Prior State. Depending on state law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, statement of conversion, certificate of conversion, or a similar term.¹⁹
• Washington Certificate of Formation. The Washington Certificate of Formation for filing with the Corporations Division of the Secretary of State.
• Washington Limited Liability Company Agreement. A state-specific Limited Liability Company Agreement to properly structure the LLC as a Washington LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution Authorizing Conversion. A resolution approving the transaction and adopting the Washington organizational documents as the LLC’s governing documents.

Administrative Tasks

After preparing and approving the conversion documents, the LLC implements the conversion by completing several administrative tasks needed to complete the process.

• Conduct preliminary name search. Check the official records of Corporations Division of the Secretary of State to determine whether the LLC’s name is available in Washington. (If the name is unavailable, a slight name change may be required to complete the conversion.)
• Obtain signatures on the Articles of Conversion. The Articles of Conversion must be signed by the required parties. The Corporations Division of the Secretary of State allows the Articles of Conversion to be e-signed.
• Obtain signatures on the Certificate of Formation. The Certificate of Formation must be signed by the required parties. The Corporations Division of the Secretary of State requires a manual (wet) signature on the Articles of Conversion (no e-signing).
• File the Articles of Conversion. File the Articles of Conversion with the Corporations Division of the Secretary of State. The Corporations Division of the Secretary of State requires the Articles of Conversion to be filed by mail or in person (no e-filing).
• File the Certificate of Formation. File the Certificate of Formation with the Corporations Division of the Secretary of State. The Corporations Division of the Secretary of State allows the Articles of Conversion to be e-filed.
• File conversion documents with prior state. File the conversion documents with the Secretary of State or equivalent agency for the state that the LLC is moving from.

What is the Legal Effect of Washington LLC Conversion?

The Washington LLC conversion process emphasizes consistency and minimizes business disruption. The legal effects of conversion include the following:

• The LLC’s identity stays the same. An out-of-state LLC that changes its domicile to Washington via conversion remains “for all purposes the same entity that existed before the conversion.”²⁰ The LLC is still the same company—like a person who moves to a new state. It keeps its Employer Identification Number and continues the same tax-reporting history.
• The LLC retains all of its assets and liabilities. After conversion, an LLC owns all assets and owes all debts and liabilities it had before the conversion.²¹ Any real estate the LLC owns before conversion remains the company’s property after conversion—with no need to record any new deeds.²²
• Contracts remain valid and enforceable. The new Washington LLC keeps its contractual rights and duties it had before conversion.²³ The business can preserve its contractual relationships and is still legally entitled to enforce contracts entered into before the conversion.
• Legal actions continue. Conversion does not affect any ongoing lawsuits or other official proceedings involving the LLC.²⁴ An LLC that changes its name during conversion just substitutes the new name in any processes that started before the conversion.
• Ownership interests are unaffected. The LLC’s members have the same membership interests in the company after conversion as they had before conversion—unless the members decide otherwise in the plan of conversion.²⁵
• The LLC is domiciled in Washington and governed by Washington law. The biggest legal result of conversion is that the LLC is now primarily governed by Washington law. The business must adjust its practices to account for any differences between the LLC laws in Washington and the LLC’s former state. The LLC is also bound by its new, Washington-oriented governing documents adopted during conversion and any other rules in its plan of conversion.²⁶

1. RCW § 25.15.436 (authorizing LLC conversions); RCW § 23B.09.010 (authorizing conversion of corporations).
2. RCW §§ 25.15.006, et. seq.
3. RCW § 25.15.451(1).
4. See RCW § 24.03A.785.
5. See RCW § 25.15.436(1).
6. RCW § 25.15.451(1).
7. RCW §§ 25.15.451(2)(a)-(2)(b).
8. RCW § 25.15.451(d).
9. See RCW §§ 25.15.294; 25.15.297.
10. RCW § 25.15.436(1)(B).
11. RCW § 25.15.031.
12. See RCW §§ 25.15.046, et seq.
13. See RCW §23.95.260(4).
14. RCW § 25.15.021.
15. RCW § 23.95.415(1)(b)(ii).
16. See RCW § 25.15.436.
17. RCW §§ 25.15.436(1)(a)-(c).
18. RCW § 25.15.436.
19. Fourteen states use the term articles of domestication to refer to the document that must be filed with the state to approve the domestication: Iowa, Massachusetts, Minnesota, Nebraska, New Hampshire, New Jersey, North Dakota, South Dakota, Utah, Vermont, Virginia, Wisconsin, Wyoming, and Indiana. The corresponding document may be called a statement of domestication (Alaska, Arizona, Connecticut, Idaho, Illinois, Mississippi, and Pennsylvania); articles of conversion (Florida, Nevada, North Carolina, Oregon, and Washington) or certificate of conversion (California, Delaware, Georgia, Michigan, Ohio, and Texas). It may also be called a statement of conversion (Colorado, Maine), certificate of domestication (Kansas), request for conversion (Louisiana), or statement/plan of domestication (District of Columbia).
20. RCW § 25.15.451.
21. RCW §§ 25.15.451(2)(a)-(2)(b).
22. RCW § 25.15.451(2)(a).
23. RCW § 25.15.451(d).
24. RCW § 25.15.451(c).
25. RCW § 25.15.436(2)(c).
26. RCW §§ 25.15.446; 25.15.071; 25.15.018; 25.15.451(e).