Convert a Business Structure

CorpNet can help you convert your business from its current entity type to another. We’re here to assist you every step of the way in preparing and filing the required documents!

What Is a Business Entity Conversion?

An entity conversion (also known as a statutory conversion) is when a company legally changes its business structure from one entity type to another. This may be referred to as Articles of Conversion or Certificate of Conversion.

Examples of business entity conversions:

• Changing from a Limited Liability Company to a C Corporation
• Changing from a C Corporation to an LLC
• Changing from a Limited Liability Company to a Limited Partnership
• Changing from a C Corporation to a Nonprofit Corporation

The rules and requirements to convert an entity depend on the state and the entity types involved (i.e., the company’s current entity type and the one it is changing to).

Why would anyone want to switch their business entity? Various factors—such as tax outcomes, adding more owners, liability considerations, management flexibility, and funding potential—may prompt business owners to convert their company to a different type of entity.

Statutory Conversions FAQ’s

Although the process varies by state and entity types involved, what are the steps typically involved in a conversion?

In states that allow conversions, the process usually goes something like this:

1. Write a Plan of Conversion that conforms to the state’s requirements.
2. Get approval from the entity’s governing bodies (e.g., LLC members, board of directors, shareholders).
3. Complete the appropriate formation document—e.g., Articles of Incorporation or Articles of Organization—for the converted entity (i.e., the entity type the business is converting to).
4. Complete a Certificate of Conversion to provide information about the converting entity (i.e., current entity) and the converted entity (the post-conversion entity).
5. File the converted entity formation document, Certificate of Conversion, and Plan of Conversion (along with any required filing fees) with the state.

How long will it take for CorpNet to complete an entity conversion for my business?

Although it can vary depending on the state and other factors, the usual processing time is 4 – 6 weeks. We can expedite an order for an approximate 1 – 2 week completion if needed.

If your state doesn’t recognize conversions, the timeframe could be longer because additional filings are involved.

What if my state does not recognize conversions?

It depends on your specific state, but generally speaking, the state will require you to file a dissolution on your existing entity and then file Articles of Incorporation or Articles of Organization to form a new entity. Note that starting a new entity entirely involves other tasks, too, such as obtaining a new EIN, designating a registered agent, applying for licenses and permits, etc. CorpNet can assist you with these other requirements as well.

What’s the advantage of doing a conversion rather than closing the business and starting a new entity entirely?

After an entity conversion, the business that exists post-conversion is considered the same—aside from operating as a different entity—as the pre-conversion business. The pre-conversion entity’s assets, liabilities, and ownership interests are transferred to the post-conversion entity. So, business owners can hit the ground running without getting bogged down with the additional documentation and formalities that come with starting a brand-new entity from scratch.

If my company files a conversion, will it affect or alter its tax obligations?

Modifying any business entity may potentially impact the company’s and its owners’ legal rights and duties and may have certain tax implications. We strongly recommend asking an attorney, an accountant, and any other service provider as needed to review your specific circumstances and ensure you’re making an informed decision for your business.

Can I convert my Sole Proprietorship to an LLC or Corporation?

Generally, converting a Sole Proprietorship to an LLC or Corporation follows many of the same steps as forming a business from scratch. States do not recognize a Sole Proprietorship as a separate entity from its owner. It is not a registered business entity that can be converted to a different entity type. Likewise, there’s no need to file Articles of Dissolution with the state to end a Sole Proprietorship.

Can I convert my General Partnership to an LLC or Corporation?

Generally, converting a General Partnership to an LLC or Corporation follows many of the same steps as forming a brand-new entity. States do not recognize a General Partnership as a separate entity from its owners. Because it’s not a registered business entity, it cannot be changed to a different entity type through a conversion, and no Articles of Dissolution are required to end a General Partnership’s existence.

Want to Convert Your Business Entity? We’re Here to Help!

If you want to change from your existing business structure to another business entity type, we can save you time and money with our fast, reliable, and affordable service. Reach out to talk with one of our experienced filing specialists, who will explain the process and answer your questions.

And remember, our services are backed by a 100% satisfaction guarantee or your money back!