How to Move an LLC to Delaware

Jeramie Fortenberry Avatar
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An out-of-state LLC can change its state of organization to Delaware through statutory conversion. Delaware conversion is a legal process that allows an out-of-state (or foreign) LLC to become a Delaware LLC under the Delaware Limited Liability Company Act. An LLC that completes a Delaware conversion changes its state of organization, also called its domicile, to Delaware.

The LLC is otherwise the same business entity before and after the conversion process. Whether the conversion can proceed also depends on the laws of the state the LLC is leaving. To determine whether your LLC qualifies and what the conversion process will involve, a free analysis of your specific move can help establish the pathway forward.

Delaware’s business-friendly laws make it one of the most popular states for organizing LLCs. An LLC converting to Delaware may do so for several reasons, including reduced reporting requirements, greater privacy for ownership, potential tax savings, management flexibility under Delaware law, and the advantages of Delaware’s well-developed business court system. This article discusses the legal requirements, documents, costs, and timeline for converting an out-of-state LLC to a Delaware LLC.

Why Business Owners Move LLCs to Delaware

Delaware’s Court of Chancery provides a specialized business court system with experienced judges (not juries) resolving business disputes.

The Delaware Limited Liability Company Act provides maximum flexibility for structuring LLC governance through the Limited Liability Company Agreement.

Delaware offers charging order exclusivity as the sole remedy for creditors of LLC members, protecting ownership interests from seizure.

Delaware does not impose a state income tax on LLCs that do not operate within the state, benefiting companies whose operations are elsewhere.

Delaware’s well-developed body of case law provides predictable legal outcomes for LLC governance disputes.

Delaware LLC Conversion Requirements

A Delaware LLC conversion is governed by both Delaware law and the laws of the LLC’s current state. Delaware’s conversion laws appear in Subchapter II of the Delaware Limited Liability Company Act.

Delaware law controls the process and documents filed in Delaware and determines the conversion’s legal effects. The current state’s law governs whether the LLC can convert to Delaware, what the plan of conversion must include, how the LLC’s members or managers must approve the plan, and the effective date for the conversion.

Eligibility for Delaware LLC Conversion

A Delaware LLC conversion is not possible for every out-of-state LLC. An LLC can convert to Delaware only if its current state also has a legal procedure for changing an LLC’s domicile. The procedure may be called conversion or domestication depending on the state. A company formed in a state with no statutory procedure for changing domicile cannot convert to Delaware.

An out-of-state LLC cannot undergo a Delaware LLC conversion if the company’s governing documents disallow conversion. The governing documents need not expressly allow conversion, but they cannot forbid it. An LLC must formally amend any governing document that prevents conversion before starting a conversion to Delaware. Delaware law calls an LLC’s two main governing documents the certificate of formation and the limited liability company agreement, though some states use the terms articles of organization and operating agreement.

Only LLCs engaged in types of business in which Delaware LLCs can engage can conduct a successful Delaware conversion. Delaware law allows LLCs to pursue “any lawful business” other than banking. An out-of-state LLC involved in banking or activities that are unlawful in Delaware cannot successfully convert to a Delaware LLC.

Required Documents for Delaware LLC Conversion

The Delaware LLC conversion process involves preparing and adopting several conversion documents that must satisfy both states’ requirements. The conversion documents memorialize the terms of the conversion and control the company when the conversion takes effect.

  • Plan of Conversion. A Plan of Conversion designed to comply with the requirements of both Delaware law and the law of the state that the LLC is moving from.
  • Certificate of Conversion. The Certificate of Conversion for filing with the Division of Corporations of the State of Delaware, with all information and any related documents needed for filing.
  • Certificate of Formation. The Delaware Certificate of Formation for filing with the Division of Corporations of the State of Delaware. The Certificate of Formation establishes the LLC as a Delaware domestic entity.
  • 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, or a similar term. This document is filed with the secretary of state or equivalent agency for the state that the LLC is moving from.
  • Delaware Limited Liability Company Agreement. A state-specific Limited Liability Company Agreement to properly structure the LLC as a Delaware 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 Delaware organizational documents as the LLC’s governing documents.

The Certificate of Conversion and Certificate of Formation accept electronic signatures and e-filing through the Division of Corporations of the Delaware Secretary of State’s office. The LLC must also conduct several administrative tasks to implement the conversion.

  • conducting a preliminary name search with the Division of Corporations to determine whether the LLC’s name is available in Delaware (a slight name change may be required if the name is unavailable)
  • obtaining signatures on the certificates
  • filing both certificates with the Division of Corporations
  • filing conversion documents with the appropriate office in the state that the LLC is moving from

Cost of Moving an LLC to Delaware

The cost of moving an LLC to Delaware depends on the scope of work described above. The documents and filings require professional preparation to comply with both states’ requirements, and coordinating submissions with two separate state agencies adds further complexity. The primary cost driver is professional preparation and state agency coordination. To find out what your specific conversion will cost, a free analysis of your LLC move can provide a detailed estimate.

In addition to professional service costs, the Division of Corporations of the State of Delaware charges filing fees totaling $180 for inbound conversion: $70 for the Certificate of Conversion and $110 for the Certificate of Formation. An LLC will also need to pay filing fees to its current state, which vary by state. Some states do not charge a fee for outbound conversions, while others charge filing fees comparable to Delaware’s amount.

A Delaware LLC must have a registered agent who can legally accept service for the company. A registered agent can be an individual Delaware resident, a business entity with a Delaware office, or the LLC itself if it has a Delaware business office that is generally open. Many business owners choose to hire commercial registered agents to promote consistency and privacy. The cost for a commercial registered agent is typically $100-$150 per year in Delaware.

An out-of-state LLC converting to Delaware will also incur labor costs. Labor costs are the amounts charged by the service provider the LLC retains to manage the Delaware conversion. Service providers may charge a flat fee or charge by the hour, with fee amounts varying by provider. Work that goes into a conversion includes obtaining and organizing information, drafting the conversion documents, communicating with the business owners and state agencies, and filing conversion documents with state agencies.

Processing Time for Delaware LLC Conversion Filings

A Delaware LLC conversion proceeds in several steps. The length of the process depends on how long each step takes. Each step depends on the responsible person’s turnaround time.

  • the business owners’ time to organize necessary information
  • the service provider’s time to review the information and prepare the conversion documents
  • the owners’ time to approve and sign draft documents
  • the service provider’s time to file the final documents with state agencies
  • the state agencies’ time to accept and process the filed documents

The conversion becomes effective upon the filing with the Division of Corporations of the State of Delaware of both the Certificate of Conversion to Limited Liability Company and the Certificate of Formation.

The Division of Corporations offers standard processing and accelerated processing options (ranging from next-day service to one-hour service) for an additional fee. For a detailed breakdown of each phase in the conversion timeline, including information on processing timeframes and expedited service availability, see our guide to the LLC conversion process.

Moving an LLC Out of Delaware

Delaware permits outbound LLC conversion under the Delaware Limited Liability Company Act. A Delaware LLC can convert to another state’s jurisdiction, provided that the destination state also authorizes the procedure.

Delaware Outbound Conversion Requirements

A Delaware LLC that converts to another state must file a Certificate of Conversion to Non-Delaware Entity with the Division of Corporations. The outbound filing must comply with the Delaware Limited Liability Company Act’s conversion provisions. The destination state will require its own formation and conversion (or domestication) documents.

Filing Fees for Moving an LLC from Delaware

The Division of Corporations of the State of Delaware charges a filing fee of $220 for an outbound Certificate of Conversion to Non-Delaware Entity. The destination state will charge separate filing fees for its formation and conversion documents.

Delaware LLC Laws That Apply After the Move

The Delaware Limited Liability Company Act (Del. Code Ann. tit. 6, ch. 18) imposes ongoing requirements on all domestic LLCs, including those formed through conversion from another state. An LLC that converts to Delaware becomes subject to these obligations immediately upon effectiveness of the conversion.

Delaware LLC Compliance Requirements

Delaware does not require LLCs to file annual reports. This reduced reporting requirement is a significant advantage of converting to Delaware, as it eliminates the burden of annual compliance filings common in other states. An LLC that converts to Delaware and no longer has to file in its original state will avoid the time and expense of annual filings.

Delaware Limited Liability Company Agreement Requirements

Delaware refers to an LLC’s internal governance document as a Limited Liability Company Agreement under the Delaware Limited Liability Company Act. The agreement governs the LLC’s internal affairs, including the rights and obligations of members and managers, profit distributions, and management structure. The agreement is not filed with the state; it is maintained by the LLC as a private document.

Delaware Registered Agent Requirements

A Delaware LLC must appoint a registered agent who can legally accept service of process on the LLC. A registered agent can be an individual Delaware resident, a business entity with a Delaware office, or the LLC itself if it has a Delaware business office that is generally open. Many business owners choose to hire commercial registered agents to promote consistency and privacy. The cost is typically $100-$150 per year.

Delaware LLC conversion moves an out-of-state LLC to Delaware. The company otherwise continues its existence as the same entity with the same date of formation, date formed in the original state. The conversion process is designed to minimize disruption and administrative burden compared to other methods for changing a business’s state of domicile. The legal effects of a conversion to Delaware are as follows:

  • Change in governing law. An LLC that converts to Delaware becomes a Delaware LLC governed by Delaware law and gets the commercial benefits that come with that. Delaware courts have jurisdiction over the converted company.
  • Contractual consistency. A Delaware LLC conversion does not affect a company’s contractual rights or responsibilities. Existing contracts remain in place and legally valid, and the LLC can continue its contractual relationships.
  • Property rights. An LLC that completes a Delaware conversion owns the same assets and owes the same debts it had before conversion. Its property rights, including ownership of real estate, are not affected. A converting LLC need not transfer or assign assets to the converted Delaware LLC because the LLC is still the same entity.
  • Consistent business identity. The LLC keeps its essential identity and remains the same company during and after conversion. It is still the same taxpayer with the same Employer Identification Number (EIN). The consistency avoids needless administrative tasks and potential confusion with government agencies.
  • Day-to-day operations continue as normal. An LLC does not have to stop doing business during the conversion process. Conversion occurs behind the scenes and need not affect the public-facing part of the business. Employment relationships are also unaffected.
  • Ownership rights. A Delaware LLC conversion affects ownership rights in the company only if the members want their rights to change. Out-of-state LLC owners typically keep the same investments, profits, and voting rights in the converted LLC. Members can agree in a plan of conversion to sell their ownership in the out-of-state LLC for cash, property, rights, or other payment.
  • No dissolution required. Conversion does not formally terminate the LLC in the original state. Dissolution, liquidation, and winding up affairs are unnecessary unless the members expressly decide otherwise. An LLC need not register as a foreign LLC in its original state unless the company will continue doing business there.

Alternatives to Delaware LLC Conversion

When conversion is not available because the other state’s law does not authorize it, a merger-based reorganization achieves the same result. The reorganization involves forming a new Delaware LLC and merging the out-of-state LLC into it, with the Delaware LLC as the surviving entity. The surviving LLC succeeds to all property, contracts, and obligations of the original LLC by operation of law. This approach provides the same legal continuity as conversion.

For a comprehensive comparison of LLC conversion and domestication laws across all states and detailed guidance on the conversion process itself, see our guide to LLC conversion and domestication by state.

Understanding the full domestication process, including document preparation and coordination between both states, is covered in detail in our guide to LLC domestication.

For a complete directory of states and the domestication or conversion procedures available in each, see our state-by-state LLC domestication directory.

Understanding the full domestication process, including document preparation and coordination between both states, is covered in detail in our guide to LLC domestication.

For a complete directory of states and the domestication or conversion procedures available in each, see our state-by-state LLC domestication directory.

Get a Free Analysis of Your LLC Move to Delaware

Every LLC move depends on the laws of two states. Our free analysis compares the requirements of your current state and Delaware, confirms whether conversion is available, and provides a step-by-step roadmap with cost estimates.