How to Move an LLC to California

An out-of-state LLC (called a “foreign LLC” under California law) can change its state of organization to California through statutory conversion under the California Revised Uniform Limited Liability Company Act (Cal. Corp. Code §§ 17701.01 through 17713.13). The process requires a plan of conversion that must be custom-drafted to comply with the laws of both California and the LLC’s current state, along with coordinated filings with both states’ agencies.

Whether the conversion can proceed depends on both states’ laws. California authorizes inbound LLC conversion, but the LLC’s current state must also permit the transaction. Not all states authorize outbound conversion or domestication, which limits the options available to LLCs formed in those states. To find out whether your specific move is available and what the process involves, you can request a free analysis of your LLC move.

After conversion, the LLC remains the same business entity with the same formation date, EIN, contracts, property, bank accounts, and employees. The conversion changes only the LLC’s legal home state without interrupting business operations.

Many states use the term domestication for the procedure that changes an LLC’s state of organization. California uses conversion for this procedure, and California law uses the same conversion process for both domicile changes and entity-type changes. A Nevada LLC, for example, could use California’s conversion process (called domestication under Nevada law) to become a California LLC. A California corporation could also carry out a conversion to change into a California LLC. A business can even use California’s conversion process to change its entity type and its domicile state in the same transaction. This article covers conversions that change an out-of-state LLC into a California LLC.

Why Business Owners Move LLCs to California

California LLC conversion is particularly useful when business owners move to California from another state and want to establish a solid business connection with their new home. An owner might transfer an LLC to California for any of the following reasons:

• Convenience. An owner of a web-based business who moves to California might find it more convenient to run the business under California law. An LLC governed by the law of the state where the owner lives often has fewer filing requirements than an LLC governed by a different state’s laws.
• Reduced compliance burden. A Delaware-chartered LLC that does business mainly in California needs to meet two sets of reporting requirements: Delaware’s annual reporting and California’s compliance obligations. Converting the Delaware LLC to a California LLC eliminates the duplicate filings and can reduce overall annual costs.
• Charging order exclusivity. California makes a charging order the exclusive remedy available to a judgment creditor of an LLC member. This means a creditor with a judgment against an individual member cannot seize the member’s LLC interest or force a liquidation of the company. The creditor’s only remedy is a charging order against the member’s right to receive distributions. This protection is one of the strongest asset-protection features available under any state’s LLC law.
• Tax savings. Each state has its own tax laws, and the taxes an LLC pays often depend on whether it has a connection with a state (called a taxable nexus). If an LLC’s owners move, the LLC’s charter could be the only factor creating a taxable nexus with the original state. Converting the LLC to California can break that nexus, potentially exempting the LLC from tax obligations in the original state.
• Easier hiring of professionals. California professionals are more likely to be familiar with California law. If the owners live in California, converting the LLC makes it easier to find lawyers, accountants, and other local professionals who know California requirements and norms.

Who Can Convert an LLC to California

California LLC conversion under Cal. Corp. Code § 17710.08(a) permits a foreign LLC to convert into a California domestic LLC, provided the converting entity’s home jurisdiction also authorizes that conversion. The primary constraint is the other state: the LLC’s current state must have a statutory procedure that lets an LLC change its domicile. Not all states do. The current state may call the process domestication, conversion, or another name.

Business owners should also review the LLC’s articles of organization and operating agreement to confirm there are no provisions that prevent conversion to a new state. If any restrictions exist, the LLC may need to amend those documents before proceeding.

An out-of-state LLC should verify that California permits LLCs to operate in the company’s field of business. California law bars most business entities that perform professional services from being organized as LLCs, unless a California licensing law specifically allows LLCs to hold the required license, certificate, or registration. An out-of-state LLC that performs professional services cannot convert to a California LLC in most cases. The business can instead organize as a California professional corporation or another entity type authorized to perform those services.

Statutory Framework for California LLC Conversion

California’s LLC conversion authority is located within the California Revised Uniform Limited Liability Company Act (Cal. Corp. Code §§ 17701.01 through 17713.13), which is codified as Title 2.6 of the California Corporations Code. The conversion provisions sit within the LLC Act’s merger-and-conversion article (Article 10) rather than in a separate statute.

Key provisions governing the conversion process include:

• Cal. Corp. Code § 17710.08(a): authorizes inbound conversion, permitting a foreign LLC to become a California LLC, provided the converting entity’s home jurisdiction also authorizes the conversion
• Cal. Corp. Code § 17710.02(a): authorizes outbound conversion, permitting a California LLC to become a foreign LLC or other entity governed by another jurisdiction’s law
• Cal. Corp. Code § 17710.03(a): governs the plan of conversion, including member approval requirements

The inbound conversion authority and the ongoing governance rules are part of the same statutory scheme. After conversion, the LLC is governed by the full California Revised Uniform Limited Liability Company Act, which supplies both the procedural framework for the conversion and the rules that govern the company’s ongoing operations as a California LLC.

Documents Required for California LLC Conversion

Moving an LLC to California requires preparing several documents that must satisfy both states’ legal requirements. The plan of conversion is central to the transaction: it is the governance document that authorizes the conversion and must be custom-drafted to comply with the laws of both jurisdictions.

• Plan of conversion. A plan of conversion designed to comply with both California law and the law of the LLC’s current state. The plan of conversion is an internal company document that is not publicly filed. It sets the terms and conditions of the conversion, including how member interests will be converted into California LLC interests.
• Articles of organization, conversion. The California Articles of Organization, Conversion (Form LLC-1A) for filing with the California Secretary of State. This single form includes both the statement of conversion and the articles of organization. The form lists information about the LLC before and after the conversion, declares that the terms of the plan of conversion were properly approved, and identifies the LLC’s agent for service of process.
• Conversion document for filing in prior state. The LLC’s current state requires its own filing to complete the outbound side of the transaction. Depending on that state’s law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, or a similar term.
• California operating agreement. A state-specific operating agreement to properly structure the LLC as a California LLC after the conversion, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution authorizing conversion. A company resolution that approves the LLC’s conversion to California and officially adopts the California articles of organization and operating agreement as the new governing documents.

The California Secretary of State accepts electronic signatures and e-filing for conversion documents.

The documents listed above are California’s requirements. The LLC’s current state imposes its own documentation requirements for the outbound side of the transaction. Both sets of requirements must be satisfied for the conversion to take effect in both jurisdictions.

How to File a California LLC Conversion

Filing the articles of organization, conversion with the California Secretary of State establishes the LLC as a domestic California LLC. Before filing, the LLC should complete several preliminary steps:

• Approve the plan of conversion by formally authorizing the transaction under the current state’s law and the LLC’s current governing documents. Approval ordinarily requires a member vote or, if the LLC is manager-managed, unanimous approval by the managers.
• Conduct a preliminary name search with the California Secretary of State to verify that the LLC’s name is available in California. If the name is unavailable, a slight name change may be needed.
• Obtain signatures on the conversion documents from appropriate individuals. If the LLC is member-managed, California law requires all members to sign the statement of conversion unless the LLC’s governing documents allow fewer than all members to approve.

Once the documents are ready, the LLC files the articles of organization, conversion with the Business Entities Office of the California Secretary of State. The conversion becomes effective in California once the filing has been accepted. The LLC must also file the required conversion or domestication documents with the filing agency for the state the LLC is leaving. The conversion’s effectiveness in the original state depends on that state’s law and when the outbound filing is accepted.

For a detailed breakdown of each phase in the conversion timeline, see our guide to LLC conversion and domestication.

Cost of Moving an LLC to California

The cost of moving an LLC to California reflects the scope of work described in the preceding sections. Professional preparation of the plan of conversion, articles of organization, California operating agreement, and coordinated filings with two state agencies are the primary cost components. To get a detailed cost estimate for your specific situation, you can request a free analysis of your LLC move.

In addition to professional service costs, the California Secretary of State charges a $70.00 filing fee for the articles of organization, conversion. The converting LLC must also file a Statement of Information within 90 days of conversion, which requires a $20.00 filing fee. These fees are in addition to any filing fees charged by the LLC’s current state for its outbound filing. Most states charge a separate fee for LLCs converting or domesticating out of state.

An out-of-state LLC that converts to California must also appoint an agent for service of process in California. The agent accepts service of process and official communications on behalf of the company, and the agent’s name and address are listed in the public records. An LLC owner or manager who lives in California can serve as agent, but many LLCs hire commercial registered agents (typically around $125.00 per year) to maintain privacy and ensure consistent handling of legal correspondence.

Legal Effect of California LLC Conversion

California LLC conversion is designed to allow for a smooth transition. The process lets the LLC continue existing and operating without interruption. After conversion, the LLC is a California LLC governed by California law, but it is otherwise the same entity. Statutory conversion is usually the best way to transfer an LLC to California compared to the other options.

• Governing law and continuity. After conversion, the LLC is a California LLC governed by the California Revised Uniform Limited Liability Company Act. The LLC remains the same entity and keeps its same EIN (Employer Identification Number) and tax identity for reporting purposes.
• Day-to-day operations continue as normal. The conversion happens behind the scenes and need not affect the public-facing part of the business. Employment relationships are not affected, so releasing and re-hiring staff is unnecessary.
• Assets, liabilities, and contracts remain effective. After conversion, the LLC has the same property rights as before. It owns the same assets, keeps the same bank accounts, and retains all contractual rights, duties, and obligations. The company remains responsible for all debts, with any liens surviving the conversion. A converted LLC does not need to record a new deed if it owns California real estate; the company may wish to record a certified copy of its certificate of conversion with the county recorder to provide notice.
• Legal proceedings. Ongoing lawsuits or court processes involving the LLC continue uninterrupted during and after conversion. If the LLC’s legal name changes during the conversion, the new name simply replaces the former name.
• Company ownership. Ownership interests in the LLC are consistent before and after conversion. Members keep the same membership percentages, and their rights and duties in relation to one another and to the company stay the same. Members who wish to make changes to the company’s ownership can do so in the LLC’s new governing documents.
• No dissolution. Conversion does not end the LLC. It remains the same entity, but it is now governed by California law instead of the prior state’s law. The LLC does not need to register as a foreign LLC in California since it is a California LLC after the conversion. It must register as a foreign LLC in the original state only if it plans to continue doing business there.

California LLC Laws That Apply After the Move

The California Revised Uniform Limited Liability Company Act (Cal. Corp. Code §§ 17701.01 through 17713.13) imposes ongoing requirements on all domestic LLCs, including those formed through conversion from another state. An LLC that converts to California becomes subject to these obligations immediately upon effectiveness of the conversion.

California Statement of Information and Compliance Requirements

California requires all domestic LLCs to file a Statement of Information with the California Secretary of State within 90 days of formation or conversion and then every two years thereafter. The filing fee is $20.00.

California LLC Operating Agreement Requirements

California refers to an LLC’s internal governance document as an “operating agreement” under Cal. Corp. Code § 17701.02(s). 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.

California LLC Member and Manager Protections

The California Revised Uniform Limited Liability Company Act imposes a duty of care and duty of loyalty on members and managers. Members must act with the care, competence, and diligence ordinarily exercised by a member in a similar capacity, and must manage the LLC’s business consistent with the duty of loyalty, including the requirement to account to the LLC and its other members regarding property or information of the LLC.

California also makes charging orders the exclusive remedy available to a judgment creditor of an LLC member. A creditor with a judgment against a member cannot seize the member’s LLC interest or force a liquidation; the creditor’s only option is a charging order against the member’s right to receive distributions. Wrongful dissociation is prohibited under California law, and a person who wrongfully dissociates as a member is liable to the company and the other members for damages.

Moving an LLC Out of California

California authorizes outbound LLC conversion under Cal. Corp. Code § 17710.02(a). A California LLC can convert to another state, provided the destination state also authorizes the procedure. The LLC must file a certificate of conversion with the California Secretary of State, accompanied by a plan of conversion approved by the LLC’s members or managers. The filing fee for the outbound certificate of conversion is $30.00. California does not require a separate certificate of surrender.

The destination state will require its own formation and conversion (or domestication) documents and will charge separate filing fees.

Alternatives to California 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 California LLC and merging the out-of-state LLC into it, with the California LLC as the surviving entity. The surviving LLC succeeds to all property, contracts, and obligations of the original LLC by operation of law. The California Secretary of State charges a filing fee of $70.00 for the certificate of merger, in addition to the $70.00 formation fee for the new California LLC. For a detailed explanation of how the reorganization process works, see our guide to LLC reorganization.

For a detailed explanation of the conversion process, including document preparation and coordination between both states, see our guide to LLC conversion and domestication. For a directory of states and the procedures available in each, see our state-by-state LLC conversion and domestication directory.