Pennsylvania LLC Plan of Domestication

Pennsylvania’s LLC laws authorize a legal procedure—called an LLC domestication—that transfers an out-of-state LLC to Pennsylvania or transfers a Pennsylvania LLC to another state.1 An out-of-state LLC that completes the Pennsylvania LLC domestication process becomes a Pennsylvania LLC governed by the Pennsylvania Uniform Limited Liability Company Act.2 The LLC otherwise remains the same company it was before the domestication.3

An LLC must complete several steps to domesticate into or from Pennsylvania. The first formal step of a Pennsylvania domestication is to prepare a written plan of domestication.

What is a Pennsylvania LLC Plan of Domestication?

A Pennsylvania plan of domestication is a written document that describes an LLC domestication and the terms under which the domestication will occur.4 A plan of domestication is essentially a blueprint outlining how a domestication will affect the company. It is an internal company document that controls how the LLC carries out the domestication process.

A domesticating LLC’s plan of domestication must comply with the domestication laws of both states. For example, a company that domesticates from Ohio into Pennsylvania must adopt a plan of domestication that satisfies Ohio law and Pennsylvania law.5

In some states, the legal procedure that changes an LLC’s legal home state—its domicile or state of organization—is called an LLC conversion. Those states call the document that describes the procedure a plan of conversion. In Pennsylvania, an LLC conversion changes a business from one entity type to another—for example, from a corporation to an LLC or vice versa.6 Thus, a Pennsylvania LLC plan of conversion is a document a business entity prepares when changing to a different entity form.7

What Information Must a Pennsylvania LLC Plan of Domestication Contain?

Pennsylvania law sets forth a list of the content that a plan of domestication must include:

  • The LLC’s name and entity type before the domestication;
  • The LLC’s name and state of organization after the domestication;
  • The manner in which a class of ownership interests entitled to special treatment (if any) will be cancelled or converted;
  • The LLC’s proposed articles of organization (or equivalent formation document) governing the company after the domestication;
  • The full text of the LLC’s operating agreement (or equivalent document) that will be in writing after the domestication;
  • The other terms and conditions of the domestication (if any); and
  • Any other provisions required by Pennsylvania law, the other state’s law, or the LLC’s governing documents.8

The above list applies specifically when a Pennsylvania LLC domesticates into another state. When an out-of-state LLC domesticates into Pennsylvania, the content of its plan of domestication is primarily determined by the original state’s law—though it is generally a good idea to include all items required by either state.9

How Does an LLC Approve a Pennsylvania Plan of Domestication?

After an LLC prepares a plan of domestication, its members must approve the plan under state law and the company’s governing documents.10 In Pennsylvania, the approval standard is set by the LLC’s operating agreement. If the operating agreement does not address approval of a domestication, the approval process depends on whether the LLC is manager-managed or member-managed:

  • Manager-managed. If the LLC is manager-managed, the managers enter a resolution proposing the plan of domestication and submitting it for a member vote. The managers provide notice of the proposed domestication to members, and the members must approve the plan by a majority vote of all members with a right to vote on the issue.11
  • Member-managed. If the LLC is member-managed, the plan of domestication must be adopted by a majority vote of members entitled to vote on the issue.12
  • Alternative approval. Regardless of the company’s management structure, an LLC may approve a plan of domestication by unanimous vote of all members.13

The approval rules listed above are applicable to domestications from Pennsylvania to another state unless the LLC’s operating agreement provides a different standard for approval. The operating agreement takes precedence over the default approval rules for any issues the operating agreement addresses.14 An out-of-state LLC domesticating to Pennsylvania approves the plan of domestication under its current state’s law (or by unanimous member approval).15

Does an LLC File its Pennsylvania Plan of Domestication?

An LLC’s plan of domestication is an internal company document that need not be filed with the Pennsylvania Bureau of Corporations. Each state involved in an LLC domestication has a different domestication document that must be filed with the state’s filing office (typically the secretary of state). In Pennsylvania, the domestication document is called a Pennsylvania statement of domestication.16 Pennsylvania law allows a Pennsylvania LLC domesticating to another state to file a signed plan of domestication in lieu of the statement of domestication itself.17

What Other Steps are Needed to Move an Out-of-Pennsylvania LLC to Pennsylvania?

Preparing and approving the plan of domestication is an important first step in the domestication process, but a domestication requires several additional steps. Along with the plan of domestication, the steps for an LLC domestication to Pennsylvania are:

  • Preparing the LLC’s Pennsylvania statement of domestication, articles of organization, and new Pennsylvania operating agreement;
  • Preparing the current state’s equivalent to the statement of domestication—which may be called articles of conversion, certificate of conversion, articles of domestication, or a similar name.
  • Filing the signed statement of domestication and articles of organization with the Pennsylvania Bureau of Corporations;
  • Filing the current state’s domestication document with the current state’s filing office (typically the secretary of state); and
  • Adopting the new Pennsylvania operating agreement.
  1. 15 Pa.C.S. §§ 371(a) and (b).
  2. 15 Pa.C.S. §§ 8811, et. seq.
  3. 15 Pa.C.S. § 376(a)(1).
  4. 15 Pa.C.S. § 372(a).
  5. 15 Pa.C.S. § 373.
  6. 15 Pa.C.S. § 351.
  7. 15 Pa.C.S. § 352.
  8. 15 Pa.C.S. § 372(a).
  9. See 15 Pa.C.S. § 372(b) (allowing a plan of domestication to include any provisions not prohibited by law.
  10. 15 Pa.C.S. § 373(a).
  11. 15 Pa.C.S. § 325(a).
  12. 15 Pa.C.S. § 325(a).
  13. 15 Pa.C.S. § 330.
  14. See 15 Pa.C.S. § 373 (“except as provided in the organic rules …”).
  15. 15 Pa.C.S. § 325(b).
  16. 15 Pa.C.S. § 375.
  17. 15 Pa.C.S. § 375(e).