There are many reasons why a business owner may want to move an LLC to Louisiana. This article discusses the use of conversion of state of organization, known in most states as LLC conversion, to transfer an LLC to Louisiana.

What is a Louisiana LLC Conversion?

Louisiana LLC conversion is a legal procedure that allows an out-of-state (or foreign) LLC to become a Louisiana LLC.¹ During and after a conversion, the LLC is still the same company, and there is no interruption in its existence or limited liability status.² A Louisiana LLC conversion simply changes the out-of-state LLC’s legal home state—called its state of organization or its domicile—to Louisiana. An out-of-state LLC that completes the process becomes a Louisiana LLC governed by the Louisiana Limited Liability Company Law.³

The Louisiana LLC conversion process is sometimes called a conversion or a change of jurisdiction. The longer names help distinguish the conversion process that changes a company’s domicile from another Louisiana transaction that is also called a conversion.

Louisiana Conversion, Domestic Entity Conversion, and Domestication

Louisiana’s other conversion process—officially called a domestic entity conversion—changes a Louisiana business’s entity type.⁴ For example, a Louisiana corporation can complete a domestic entity conversion to become a Louisiana LLC, or a Louisiana limited liability partnership could change to a corporation.⁵

Some states use the name domestication for the procedure that changes a business’s domicile and conversion for the procedure that changes a business’s entity type. Louisiana uses the name domestication only for the procedure that changes a corporation’s (but not an LLC’s) domicile.

Other states have a single procedure—called a conversion—that can change a company’s state of organization or change its entity type. Louisiana has two separate procedures that are both called conversions. This article focuses on Louisiana LLC conversions that change out-of-state LLCs into Louisiana LLCs. The article will use the term conversion to avoid confusion.

Why Transfer an LLC to Louisiana?

There are many potential reasons why a business owner might want to officially move a business to Louisiana. These are some of the most common:

• Convenience. The sunbelt region is home to many of the nation’s fastest growing states. An LLC owner who moves his or her personal residence to Louisiana might want to bring along the business. It can be more convenient to have a business governed by the owner’s home state, and dealing with state offices is often easier closer to home.
• Reduced reporting. An LLC typically must file annual reports in its domicile state and in any other states where it is registered to do business as an out-of-state (foreign) LLC. A business that operates mostly in Louisiana but is domiciled in a different state may reduce its annual reporting by converting into a Louisiana LLC. Louisiana’s annual reporting fee is only $30.00, so a change of domicile to Louisiana may also result in lower filing fees.
• Professional hiring. An LLC owner often must hire attorneys, accountants, or other professionals to complete projects for the company. A business owner who lives in Louisiana can find nearby professionals with expertise in Louisiana law with little difficulty. On the other hand, a Louisiana resident whose business is domiciled in Nevada (for example) will have a tougher time finding qualified professionals who are local. Establishing relationships with professionals in the same community allows for in-person meetings and can help with networking.
• Tax savings. A state’s right to tax an LLC requires a sufficient connection—or taxable nexus—between the state and the company. An out-of-state LLC that changes its state of organization to Louisiana may avoid taxation by its former state if the change removes the taxable nexus. Limiting the number of states that can tax a business often results in a lower overall tax burden for the LLC.
• Legal and regulatory structure. Louisiana does not typically appear in lists of the best states for business. However, the state government has been making recent efforts to improve the business climate. A business might want to switch to Louisiana if Louisiana law fits well with the owners’ business plan or if state-level incentives for Louisiana businesses would help the company. Louisiana has started offering several tax credits and rebates for businesses that employ Louisiana workers and for construction or expansion of facilities in Louisiana.

What Are the Benefits of a Louisiana LLC Conversion?

A Louisiana LLC conversion is the most streamlined and simplest approach to transferring an out-of-state LLC to Louisiana. The statutory procedure offers several important benefits—and avoids significant hassles—compared to other methods of officially moving a business.⁶

• The LLC keeps the same identity. An out-of-state LLC that changes its state of organization to Louisiana is the same entity throughout the process. It keeps the same EIN (Employer Identification Number) and has the same transactional history. A change to a business’s official identity can lead to problems with government offices and administrative confusion (among other problems).
• The LLC can keep the same bank accounts. The Louisiana LLC can continue using the same bank accounts that the out-of-state LLC used before the move. The company keeps all its same assets, and there is no need to formally transfer title between entities.
• Company debts are also unaffected. The official transfer to Louisiana does not affect any debts or contractual obligations owed by the LLC. It can keep the same credit accounts and cards, and lender relationships are not altered.
• Existing contracts and employment agreements remain valid. Conversion of an out-of-state LLC’s state of organization to Louisiana does not interfere with contractual relationships. Contracts are still valid and enforceable, and the LLC has the same rights and obligations. Employer-employee relationships also survive the transfer, so there is no need to fire and re-hire employees.
• Day-to-day operations carry on as normal. An LLC does not need to change its regular operations during or after a conversion of its state of organization to Louisiana. The change occurs primarily on paper and behind the scenes. There is no need to shutdown office locations or change operating hours.
• Dissolution and registration in the former state are unnecessary. Louisiana’s conversion-of-state-of-organization process is specifically designed to avoid dissolving the company. The same LLC moves to a new state, so the out-of-state LLC need not wind up its affairs or dissolve. Registration as a foreign LLC in the original state is optional. The LLC can register if it wants to keep doing business there, but it does not have to.

What LLCs Can Convert to Louisiana LLCs?

Louisiana’s conversion process is not available to every LLC. An out-of-state LLC must be in a state that has a statutory process for changing an LLC’s domicile, and it must be involved only in business allowed for Louisiana LLCs.

Louisiana law authorizes LLC conversions only if the other state does not prohibit them.⁷ That means the LLC’s current state must have a statutory procedure—typically called LLC domestication or LLC conversion—for officially moving an LLC to a new state. A company that is currently in a state with no such procedure cannot convert its state of organization to Louisiana.

If the current state allows the procedure, the LLC should also confirm that Louisiana LLCs can do the type of business the company does. Louisiana generally allows LLCs to engage in any lawful business except insurance.⁸ Thus, an out-of-state LLC in the insurance industry should not transfer to Louisiana. Also, if Louisiana has a law that specifically regulates the LLC’s field, the LLC must be sure that the specific law does not disallow LLCs.⁹

Louisiana Low-Profit LLCs and PLLCs

Louisiana has special rules for LLCs considered low-profit LLCs and for LLCs that provide professional services (often called professional limited liability companies or PLLCs). An out-of-state LLC that falls within either category should ensure it meets all requirements before transferring to Louisiana.

Louisiana law includes specific requirements for low-profit LLCs.¹⁰ They must have a charitable or educational purpose—and not a political or legislative purpose—within the meaning of federal tax law.

Louisiana allows LLCs to provide professional services but has no specific authorizing statutes for PLLCs other than in the field of dentistry.¹¹ Before changing its domicile to Louisiana, an out-of-state LLC that offers a professional service—a service that requires a license or equivalent—needs to verify that it has (or is eligible for) the necessary license and meets all other Louisiana requirements.

How Much Does Louisiana LLC Conversion Cost?

Louisiana’s conversion-of-state-of-organization process is relatively inexpensive compared to other methods of changing an LLC’s domicile state. The principal costs of the process are labor costs, filing fees, and registered agent fees (if the LLC hires one).

Labor Costs for a Conversion

An LLC’s labor costs for converting its state of organization are the amounts paid to the service provider the LLC hires to administer the conversion. A service provider’s work will include:

• Acquiring the necessary information;
• Preparing conversion documents that meet both states’ requirements;
• Telephone calls, emails, in-person meetings, and/or other communications with the LLC owners; and
• Filing conversion documents and communicating with state agencies.

The labor costs charged for an LLC conversion vary between providers and may be higher for more complex transactions. Some providers charge a flat fee, and others have an hourly rate.

Filing Fees for a Conversion

An out-of-state LLC that converts into a Louisiana LLC must pay filing fees to state agencies for the conversion documents. The Louisiana Secretary of State’s office charges $100.00 for filing an LLC’s Request for Change of State of Organization.¹² By comparison, the fee for requesting authorization for an out-of-state LLC to do business in Louisiana is $150.00.

A converting LLC’s current state will also charge filing fees for that state’s version of what Louisiana calls request for conversion. Common names for the document are articles of domestication and certificate of conversion. Most states charge a lower filing fee for a domestic LLC converting out of the state than for an out-of-state LLC converting into the state.

Registered Agent Fees

Louisiana law requires every LLC to have a registered office in Louisiana and to name a registered agent.¹³ The registered agent is a person who has official authority to accept service of process and other important communications on behalf of the LLC.

An LLC’s registered agent must be a Louisiana resident individual or a business entity with:

• Authority to do business in Louisiana;
• An organizational document (for example, articles of organization) that allows the entity to act as an LLC’s registered agent; and
• A certificate on file with the Louisiana Secretary of State that names at least two individuals at the entity’s Louisiana address who are authorized to receive service of process as an agent.

Most adult individuals who live in Louisiana—including an LLC’s member or manager—are eligible to serve as an LLC’s registered agent. However, a registered agent’s name and address are public information easily obtainable from the Louisiana Secretary of State’s website. For that reason, LLCs often opt to hire commercial registered agents to protect member privacy. A commercial registered agent is a service that charges an annual fee to act as a business’s registered agent.

Along with protecting privacy, commercial registered agents also help keep official communications consistent and organized. The fee is relatively low (typically, $50.00–$150.00 per year in Louisiana), so hiring a commercial registered agent is a good decision for many LLCs.

How Long Does Louisiana LLC Conversion Take?

The LLC conversion process is usually the quickest method to change an LLC’s state of organization. The total time needed to complete the process varies. This is because the timeline is largely dependent on how long the parties take to complete each step:

• How long the LLC members or managers take to organize the necessary information and provide it to the document preparer;
• How long the document preparer takes to complete the initial conversion documents and send them to the members or managers for review;
• How long the members or managers take to review the draft conversion documents and either sign them or request revisions;
• How long the document preparer or other responsible person takes to file the final, signed conversion documents with the Louisiana Secretary of State’s office and the current state’s equivalent office; and
• How long the state offices take to process the filed conversion documents.

After receiving the filing fees and reviewing the conversion documents, the Louisiana Secretary of State’s office will either issue a certificate of conversion that confirms the LLC’s move to Louisiana or inform the filer of any problems with the request for conversion.¹⁴ The Louisiana Secretary of State’s office typically processes conversion documents within a few business days. In-person filers can request same-day or 24-hour processing for an extra fee of $50.00 or $30.00 (respectively).

See How Long Does the LLC Domestication Process Take? for a more detailed explanation of the LLC domestication timeframe.

What Laws Govern Louisiana LLC Conversion?

A Louisiana LLC conversion must be carried out in compliance with both Louisiana law and the law of the LLC’s current state. If both states’ laws address a particular aspect of the process, the LLC must take care to meet all requirements.

Louisiana’s requirements are described throughout this article. The LLC’s current state’s law specifically decides:

• Whether conversion from the current state to Louisiana is possible;¹⁵
• What issues must be addressed in a written plan of conversion (if the state requires a written plan);
• What documents must be filed in the current state to complete the process; and
• Any additional conversion requirements described in the current state’s law.

It is important to be familiar with both states’ laws and the LLC’s governing documents to ensure that the LLC satisfies all conditions for successful conversion of its domicile to Louisiana.

What is the Louisiana LLC Conversion Process?

The Louisiana LLC conversion process consists of two components: document preparation and administrative tasks.

Document Preparation

A Louisiana LLC conversion requires careful preparation of several conversion documents. The documents memorialize the conversion and describe the conversion terms agreed by the LLC members.

• Plan of Conversion. A Plan of Conversion that is designed to comply with the requirements of both Louisiana law and the law of the state that the LLC is moving from.
• Louisiana Request for Conversion. The Louisiana Request for Conversion with all information and any related documents needed for filing with the Louisiana Secretary of State.
• 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, statement of conversion, certificate of conversion, or a similar term.¹⁶
• Louisiana Articles of Organization. The Louisiana Articles of Organization for filing with the Louisiana Secretary of State. The Articles of Organization must be accompanied by the LLC’s Initial Report with Agent’s Affidavit and Acknowledgment of Acceptance.
• Louisiana Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as a Louisiana 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 Louisiana organizational documents as the LLC’s governing documents.

Administrative Tasks

An LLC must finish several administrative tasks to officially complete the process of converting its state of organization to Louisiana. After the tasks are completed and state agencies process the documents, the LLC is a Louisiana LLC.

• Conduct preliminary name search. Check the official records of the Louisiana Secretary of State to determine whether the LLC’s name is available in Louisiana. (If the name is unavailable, a slight name change may be required to complete the conversion.)
• Obtain signatures on the Request for Conversion. The Request for Conversion must be signed by the required parties. The Louisiana Secretary of State allows the Request for conversion to be e-signed.
• Obtain signatures on the Articles of Organization. The Articles of Organization and Initial Report must be signed by the required parties. The Louisiana Secretary of State allows the Articles of Organization to be e-signed. The Agent’s Affidavit within the Initial Report must have the registered agent’s signature.
• File the Request for Conversion. File the Request for Conversion with the Louisiana Secretary of State’s office. The Business Services of the Secretary of State allows the Articles of Organization to be e-filed.
• File the Articles of Organization. File the Articles of Organization with the Louisiana Secretary of State’s office. The filed Articles of Organization must include the Initial Report with Agent Affidavit. The Louisiana Secretary of State allows the Articles of Organization to be e-filed.
• File conversion documents with prior state. File the conversion documents with the Secretary of State or equivalent agency for the state that the LLC is moving from.

What is the Legal Effect of Louisiana LLC Conversion?

A Louisiana LLC conversion allows an LLC formed in another state to transfer to Louisiana without disrupting its business. The conversion becomes legally effective when the Louisiana Secretary of State’s office approves the conversion documents and issues a certificate of conversion.¹⁷

The legal effects of a completed conversion are outlined in the Louisiana law and listed below:¹⁸

• Company existence. A converting LLC continues to exist as the same entity without interruption during and after conversion. It has the same transactional history and keeps using the same EIN and other tax identification numbers.
• Governance. The converted LLC is a Louisiana LLC governed by Louisiana law. It is no longer organized in the former state. The LLC’s new Louisiana articles of organization and operating agreement take effect and control the company’s internal affairs going forward.
• Company assets. The LLC retains all the same property rights and interests throughout a conversion. The Louisiana LLC holds title to any real estate that the out-of-state LLC held—with no need to sign deeds, asset assignments, or other transfer documents.
• Company liabilities. Any debts, taxes, and obligations owed by the out-of-state LLC are owed by the Louisiana LLC after the conversion. The conversion process does not interfere with or disturb creditors’ liens or other rights (if any).
• Contracts. The company’s contracts remain valid and enforceable throughout a conversion. The Louisiana LLC has the same contractual rights, duties, and obligations that the out-of-state LLC had before the conversion.
• Legal cases. Conversion does not interfere with legal cases or administrative proceedings involving the LLC or an LLC member or manager acting in that capacity. Cases move forward the same as they would absent the conversion, and there is no need to substitute the Louisiana LLC as a new party.
• Ownership interests. Conversion of an out-of-state LLC’s state of organization to Louisiana ordinarily has no effect on ownership interests in the company. Interests in the out-of-state LLC become interests in the Louisiana LLC in the same proportions unless members decide differently in a plan of conversion. If members choose to treat ownership interests differently, the interests convert as described in the plan of conversion when the conversion process becomes legally effective.¹⁹ LLC members may elect to convert out-of-state LLC interests into interests in the Louisiana LLC, cash, property, other interests, or rights.