How to Move an LLC to Ohio

An out-of-state LLC can change its state of organization to Ohio through statutory conversion. Ohio conversion is a legal procedure that changes an LLC’s state of organization, the state whose law primarily governs the company. An out-of-state LLC, also called a foreign LLC, that converts to Ohio becomes an Ohio LLC governed by the Ohio Revised Limited Liability Company Act (Ohio Rev. Code ss. 1706.01 through 1706.84).

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 find out whether your LLC qualifies and what the process involves, request a free analysis of your LLC move.

Some states use the name domestication for the legal procedure that changes an LLC’s state of organization, also called its domicile. In many of those states, a business can complete a domestication to change its domicile or to change its entity type. The same statutory process can accomplish either goal. Ohio uses the term conversion for this procedure. This article deals with conversions that change an out-of-state LLC into an Ohio LLC.

Why Business Owners Move LLCs to Ohio

An Ohio LLC conversion may make sense if a business owner moves to Ohio or if the owners prefer to have Ohio law govern the company. An owner might transfer an LLC to Ohio for any of the following reasons:

• Transfer the business to the owner’s new home state. It is often more convenient for an LLC owner who relocates to Ohio if the business and owner have the same home state. A business owner who moves from New Jersey to Ohio, for example, may have access to more in-state resources if the business is an Ohio LLC.
• Reduce filing requirements. LLCs in most states must file annual reports and pay the associated filing fees. An LLC that does business in more than one state may have to file multiple annual reports. Ohio does not require annual reports or filing fees from LLCs. An out-of-state LLC may reduce or eliminate its annual reporting requirements by converting to Ohio.
• Decrease the business’s taxes. An LLC’s obligation to pay taxes to a state depends on whether there is a strong enough connection, or taxable nexus, between the business and the state. An LLC owner who moves to Ohio may end the LLC’s connection with the original state by converting it into an Ohio LLC. If there is no longer a taxable nexus, the business will no longer owe taxes in the original state.
• Better business law. A business may benefit from an Ohio LLC conversion if Ohio law is better suited to the owners’ business strategy. Ohio’s LLC law allows operating agreements that are more customized to the company’s situation and goals. The increased flexibility gives the members more options in how they define the management arrangement and the parties’ legal relationships.
• Access to local professionals. Most businesses need to hire lawyers, accountants, and other professionals from time to time. A business owner who lives in Ohio can more easily find local professionals with experience in Ohio law. An Ohio LLC conversion may help the owner establish durable business relationships with local professionals.

Ohio LLC Conversion Requirements

Ohio LLC conversion under Ohio Rev. Code s. 1706.72 is not available for every out-of-state LLC. An LLC converting to Ohio must comply with both Ohio law and the current state’s law. Ohio law controls the process and documents filed in Ohio and determines the conversion’s legal effects.

The current state’s law governs whether the LLC can convert to Ohio (the state must authorize conversion), the content of the written declaration of conversion if required, the standard under which the LLC’s members or managers must approve the declaration of conversion, and the effective date for the conversion.

Eligibility for Ohio LLC Conversion

An LLC considering conversion to Ohio must confirm that it is eligible for the process. The principal requirement is that the current state must authorize LLC conversions. Not all states do. The current state may call the process conversion, domestication, or another name. The important part is that the state must have a statutory procedure that lets an LLC organized in that state change its domicile to a new state.

Business owners must also review the LLC’s articles of organization and operating agreement to ensure there are no provisions that prevent conversion to a new state. If any restrictions are present, the LLC may need to formally amend the documents to allow the procedure.

An out-of-state LLC must also confirm that Ohio lets LLCs engage in the company’s field of business. Ohio’s LLC law gives LLCs wide latitude to carry on any lawful activity. Some states prohibit LLCs from providing professional services, which are services that require a license or comparable authorization. Ohio LLCs can provide professional services if the members hold all necessary licenses.

Before starting an Ohio conversion, an out-of-state LLC that offers professional services should first verify that the members and the company satisfy all requirements to offer the professional services in Ohio. An out-of-state LLC must also confirm that its area of business is lawful in Ohio in general. If Ohio prohibits the type of business in which the company is engaged, it should not convert to Ohio.

Required Documents for Ohio LLC Conversion

The Ohio 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 after filing.

• Declaration of Conversion. A Declaration of Conversion designed to comply with the requirements of both Ohio law and the law of the state that the LLC is moving from. The declaration must state the LLC’s name and entity form before conversion, the LLC’s name and entity form after conversion, the terms and conditions of the conversion (including how interests convert into membership interests in the Ohio LLC), and the organizational documents of the converted entity.
• Certificate of Conversion. The Ohio Certificate of Conversion (Form 800) for filing with the Ohio Secretary of State’s Business Services Office. The certificate must contain all information required by Ohio Rev. Code s. 1706.722(A).
• Articles of Organization. The Ohio Articles of Organization for filing with the Ohio Secretary of State’s Business Services Office. The Articles of Organization is filed together with the Certificate of Conversion and establishes the LLC as an Ohio domestic entity under Ohio Rev. Code s. 1706.01(A).
• 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.
• Ohio Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as an Ohio 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 Ohio organizational documents as the LLC’s governing documents.

The Certificate of Conversion and Articles of Organization accept electronic signatures under Ohio law. Filing through the Ohio Secretary of State’s Business Services Office allows e-filing for electronically signed documents.

The LLC also completes several administrative tasks to implement the conversion.

• conducting a preliminary name search with the Ohio Secretary of State to determine whether the LLC’s name is available in Ohio (if the name is unavailable
• a slight name change may be required); obtaining signatures on the Certificate of Conversion; obtaining signatures on the Articles of Organization; filing both the Certificate of Conversion and Articles of Organization with the Ohio Secretary of State’s Business Services Office;
• filing conversion documents with the Secretary of State or equivalent agency for the state that the LLC is moving from

Cost of Moving an LLC to Ohio

The cost of moving an LLC to Ohio depends on the scope of work involved. The documents and filings described above require professional preparation to comply with both states’ requirements, and coordinating submissions with two separate state agencies adds further complexity. To find out what your specific move will cost, request a free analysis of your LLC move.

In addition to professional service costs, the Ohio Secretary of State charges a $99.00 filing fee for the Certificate of Conversion and a $99.00 filing fee for the Articles of Organization. The total Ohio filing fee for inbound conversion is $198.00. The fees paid to Ohio are in addition to any filing fees that must be paid to the LLC’s original state. Most states charge a separate fee for LLCs converting out of state.

An out-of-state LLC that converts to Ohio will also incur labor costs and, if applicable, statutory agent fees. Labor costs are the amounts charged by the service provider the LLC retains to manage the Ohio 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 (the Ohio Secretary of State), and filing conversion documents with state agencies.

Ohio requires every LLC to list with the secretary of state a statutory agent who is authorized to accept service of process for the company under Ohio Rev. Code s. 1706.01(A). The statutory agent may also be called the LLC’s registered agent or designated agent. Ohio law requires statutory agents to consent to the role by signing an Acceptance of Appointment within the LLC’s Articles of Organization under Ohio Rev. Code s. 1706.30(D).

A statutory agent’s name and address are publicly available information. Companies often hire commercial statutory agents, vendors who charge a fee to act as a business’s statutory agent, for stability in legal matters. Hiring a commercial statutory agent also lets an LLC avoid publishing members’ or managers’ addresses. Commercial statutory agents in Ohio typically charge around $100.00 per year.

Processing Time for Ohio LLC Conversion Filings

An Ohio 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 the necessary information, the service provider’s time to review the information and prepare the conversion documents, the owners’ time to approve and sign the draft documents (or request revisions), the service provider’s time to file the final conversion documents with state agencies, and the state agencies’ time to accept and process the filed documents.

The Ohio Secretary of State’s office estimates the average processing time for business filings at around 3 to 7 business days. Expedited 2-day processing is available for an extra $100.00. Businesses that file documents via hand-delivery at the Secretary of State’s physical office can pay $200.00 for 1-day processing or pay $300.00 for same-day processing if filed before 1:00 p.m. The conversion becomes effective when the articles of organization take effect under Ohio Rev. Code s. 1706.722(B)(1).

Moving an LLC Out of Ohio

Ohio permits outbound LLC conversion under Ohio Rev. Code s. 1706.72(A). An Ohio LLC can convert to another state’s LLC jurisdiction, provided that the destination state also authorizes the procedure.

Ohio Outbound Conversion Requirements

An Ohio LLC that converts to another state must file a Certificate of Conversion (Form 700) with the Ohio Secretary of State’s Business Services Office. The outbound filing must include a declaration of conversion approved by the LLC’s members or managers in accordance with Ohio Rev. Code s. 1706.72.

Ohio does not require a separate certificate of surrender. The Certificate of Conversion completes the Ohio side of the transaction. The destination state will require its own formation and conversion (or domestication) documents.

Filing Fees for Moving an LLC from Ohio

The Ohio Secretary of State charges a filing fee of $99.00 for an outbound Certificate of Conversion. The destination state will charge separate filing fees for its formation and conversion documents.

Ohio LLC Laws That Apply After the Move

The Ohio Revised Limited Liability Company Act (Ohio Rev. Code ss. 1706.01 through 1706.84) imposes ongoing requirements on all domestic LLCs, including those formed through conversion from another state. An LLC that converts to Ohio becomes subject to these obligations immediately upon effectiveness of the conversion.

Ohio No Annual Reporting Requirement

Ohio does not require annual reports from LLCs. This absence of an annual filing requirement is a significant advantage of Ohio LLC law compared to most other states. An LLC that converts to Ohio and no longer has to file in the original state will avoid the time and expense of annual filings entirely.

Ohio LLC Operating Agreement Requirements

Ohio refers to an LLC’s internal governance document as an Operating Agreement under Ohio Rev. Code s. 1706.01(R). The Operating Agreement governs the LLC’s internal affairs, including the rights and obligations of members and managers, profit distributions, and management structure. The Operating Agreement is not filed with the state; it is maintained by the LLC as a private document. Ohio law allows operating agreements that are highly customized to the company’s situation and goals.

Ohio LLC Member and Manager Protections

Ohio LLC law provides members and managers with statutory protections. A charging order against a member’s membership interest is the exclusive remedy for a creditor of the member under Ohio Rev. Code s. 1706.342(A). Managers and members owe fiduciary duties of care and loyalty to the LLC and other members under Ohio Rev. Code s. 1706.31. These duties can be waived or modified by the LLC’s Operating Agreement.

Legal Effect of Ohio LLC Conversion

Ohio LLC conversion moves an out-of-state LLC to Ohio. The company otherwise continues its existence as the same entity with the same date of formation. The company expends substantially less time and money on administrative matters compared to other methods for changing a business’s state of domicile. Ohio law declares that the legal effects of a conversion to Ohio are as follows:

• Governing law. After conversion, the LLC is an Ohio LLC governed by the Ohio Revised Limited Liability Company Act. Ohio courts have jurisdiction over the converted company. The LLC’s Ohio Certificate of Conversion, Articles of Organization, and Operating Agreement are effective and binding on the company and its members.
• The LLC retains its identity and Employer Identification Number. The LLC remains the same company during and after the conversion. It can keep its Employer Identification Number (EIN) and has the same history as a taxpayer.
• 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.
• There is no need to transfer assets or change bank accounts. The LLC is still the same company, so it does not need to transfer assets or sign deeds to convey real estate. Bank accounts and other financial accounts are not affected by the conversion.
• Contracts remain effective. The LLC’s contracts from before the conversion are still valid and enforceable after conversion. The LLC keeps the same contractual rights and obligations. Employment relationships are also unaffected, so there is no break in the business’s employment of its employees.
• Assets and liabilities stay the same. A converting LLC keeps all its same assets. There is no need to close bank accounts and open new ones. Deeds, assignments, and other transfer documents are also unnecessary. The LLC also owes all the same debts and taxes that it owed before conversion.
• Legal proceedings continue uninterrupted. Any legal cases or administrative proceedings in which the LLC is involved continue uninterrupted. If the company’s name changes as part of the conversion, the new name is simply substituted for the old name.
• Ownership interests remain the same. Members’ interests in the out-of-state LLC become interests in the Ohio LLC in the same percentages. The members can opt for a different treatment in the declaration of conversion.
• No dissolution. Conversion is not considered a dissolution of the company. It does not have to wind up affairs, pay off liabilities, or distribute assets. Conversion is not treated as a transfer of assets, so there is no need to create deeds, transfer instruments, or asset assignments.

Alternatives to Ohio 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 Ohio LLC and merging the out-of-state LLC into it, with the Ohio LLC as the surviving entity.

The surviving LLC succeeds to all property, contracts, and obligations of the original LLC by operation of law. Understanding the full reorganization process is covered in detail in our guide to LLC reorganization. For a state-by-state comparison of LLC conversion and domestication laws across all states, see our guide to LLC conversion and domestication by state.