How To Convert Your Company From One Type To Another

In some cases a company that was formed as one entity type (LLC, Corporation, etc.) reaches a point where it becomes necessary or preferable to change its type to a different entity type. Examples of such cases vary from LLCs looking to raise money from investors, who require shares of stock and more formal management structure, or corporations that due to tax or other reasons need to become LLC.

It is possible to dissolve the old company and form a new one, but this way the company looses it’s original formation date, and would need new tax ID, resign all existing contract, and so forth.

Conversion offers a convenient way of changing entity type without the need to start all company affairs from the scratch. Most states support conversion from LLC to Corporation and from corporation to LLC, while a few support only conversion to one entity type. A few states do not support conversions at all.

States That Support Some Conversions

ollowing states support conversion of Corporation to LLC only:

* Alaska corporation can only be converted to an LLC only if the corp is a subsidiary of another corporation

States That Do Not Support Conversion

Some states don’t support conversions at all:

  • Arizona
  • Missouri
  • New Jersey
  • Connecticut
  • Mississippi
  • New York
  • District of Columbia
  • Montana
  • Pennsylvania
  • Illinois
  • Nebraska
  • Vermont
  • Maryland
  • New Hampshire

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