North Carolina law authorizes out-of-state LLCs to move to North Carolina—or North Carolina LLCs may move to other states—by completing a procedure called an LLC conversion. The North Carolina LLC conversion process is the equivalent of what some states call LLC domestication. The process changes an LLC’s legal home state (called its domicile or state of formation) to North Carolina without affecting the LLC’s identity, assets, liabilities, contractual relationships, or tax history.1
An LLC that completes the North Carolina conversion process must prepare several legal documents. The primary document a converting LLC files in North Carolina is called a North Carolina articles of conversion.
What are North Carolina LLC Articles of Conversion?
North Carolina law uses the name articles of conversion for the document converting LLC files in North Carolina. There are two different versions of the articles of conversion—depending on whether the LLC is moving into North Carolina or leaving North Carolina:
- Conversion to North Carolina. Out-of-state LLCs moving to North Carolina file articles of organization including articles of conversion (Form L-01A).2
- Conversion from North Carolina. North Carolina LLCs transferring to another state file articles of conversion to a foreign entity (Form BE-16).3
These documents provide the North Carolina Secretary of State with important information about the LLC and the change to the company’s domicile. The North Carolina Secretary of State publishes forms for LLCs to use when converting.4
What Information Must North Carolina Articles of Conversion Include?
Some states require converting LLCs to file two separate forms when transferring into the state: the conversion document and the formation document. North Carolina combines a converting LLC’s articles of conversion and articles of organization into a single form called articles of organization including articles of conversion. The form includes all information ordinarily contained in a new North Carolina LLC’s articles of organization:
- The LLC’s name in North Carolina;
- The LLC’s principal business address and mailing address; and
- The name and address of the LLC’s registered agent.5
The articles of conversion form also provides additional information about the conversion:
- The out-of-state LLC’s name, entity type, and state of formation prior to the conversion;
- A statement that the document is filed for the purpose of converting the eligible entity into an LLC;
- The out-of-state LLC’s mailing address prior to the conversion; and
- A statement that the conversion has been approved as required by law.6
Other Names for Articles of Conversion
The conversion process in North Carolina is the equivalent of what many states call an LLC domestication. North Carolina’s LLC laws do not use the word domestication, but the terms North Carolina LLC domestication or LLC domestication to North Carolina are sometimes used informally to refer to a conversion procedure that changes an out-of-state LLC’s domicile state to North Carolina.
Other states that authorize LLC conversions or domestications also require the LLC to file a document with the details of the transaction. Another state’s version of what North Carolina calls articles of conversion may be called any of the following names:
- Certificate of conversion;
- Statement of conversion;
- Articles of domestication;
- Certificate of domestication; or
- Statement of domestication.
A converting LLC will need to file a conversion document with both states: the LLC’s current state and North Carolina. It is important for each conversion document to comply with the laws of the state where it is filed. Filing an identical conversion document in both states will not work.
How Does an LLC Sign and File its North Carolina Articles of Conversion?
Before an LLC can file its articles of conversion, a person with authority to act for the company—typically a member, manager, or authorized officer—signs the articles of conversion on the LLC’s behalf.7 The signature must be dated, and the completed form must include the signer’s printed name and title.
The completed articles of conversion is filed with the North Carolina Secretary of State’s Business Registration Division. North Carolina business documents can be submitted via hand delivery, mail, or through the Secretary of State’s PDF upload portal.
The filing fee for North Carolina articles of conversion depends on whether the LLC is transferring into North Carolina or from North Carolina.8
- Conversion to North Carolina. An out-of-state LLC filing its articles of conversion to move to North Carolina pays a $125.00 filing fee.
- Conversion from North Carolina. A North Carolina LLC filing its articles of conversion to move to another state pays a $50.00 filing fee.
When is a North Carolina LLC Articles of Conversion Effective?
North Carolina’s general rule is that an LLC conversion is effective when the company’s articles of conversion are filed and accepted by the North Carolina Secretary of State.9 However, an LLC may delay a conversion’s effectiveness by listing a delayed effective date in the articles of conversion. The delayed effective date can be up to 90 days after filing.10
When the conversion takes effect, the LLC is still the same entity—with the same assets, liabilities, and contractual rights and obligations. But it is now governed by the laws of the new state. For an out-of-state LLC that converts to North Carolina, that means that when the conversion is complete the LLC is a North Carolina LLC governed by the North Carolina Limited Liability Company Act.11
Does a North Carolina LLC Conversion Require any Other Steps?
Filing the articles of conversion is an essential part of the North Carolina LLC conversion process but is not by itself sufficient to move an out-of-state LLC to North Carolina. An out-of-state LLC must complete the following steps to properly change its domicile to North Carolina:
- Create a written plan of conversion containing the information required by North Carolina law;12
- Prepare the North Carolina articles of organization and conversion;13
- Prepare the document that the current state requires LLCs to file when domesticating to another state;
- Prepare and approve the LLC’s new operating agreement designed for North Carolina law;14
- Approve the plan of conversion under the current state’s approval standard and prepare any company resolutions needed to authorize the conversion documents;15
- File the North Carolina articles of organization and conversion with the North Carolina Secretary of State;
- File the current state’s domestication document with the office that accepts business filings in that state (the secretary of state’s office in most states); and
- Complete any additional steps that the LLC’s operating agreement or original state’s law requires.
It is important for a converting LLC to carry out the conversion process in compliance with the laws of both states. Missed steps or carelessly prepared conversion documents can result in an invalid conversion.
Legal References
- N.C.G.S. § 57D-9-23(a). ↩︎
- N.C.G.S. §§ 57D-9-22; 57D-9-32. ↩︎
- N.C.G.S. § 57D-9-32. ↩︎
- N.C.G.S. § 57D-1-21. ↩︎
- N.C.G.S. § 57D-2-20. ↩︎
- N.C.G.S. § 57D-9-22. ↩︎
- N.C.G.S. § 57D-1-20. ↩︎
- N.C.G.S. § 57D-1-22. ↩︎
- N.C.G.S. §§ 57D-9-23; 57D-9-33. ↩︎
- N.C.G.S. § 55D-13. ↩︎
- N.C.G.S. §§ 57D-1-01, et. seq. ↩︎
- N.C.G.S. § 57D-9-21. ↩︎
- N.C.G.S. § 57D-9-22(a). ↩︎
- N.C.G.S. § 57D-1-03(23). Although they are sometimes overlooked, operating agreements are an essential governing document that allows for customization of an LLCu2019s management and internal affairs. ↩︎
- N.C.G.S. § 57D-9-21(d). ↩︎