How to Move an LLC to Delaware

An out-of-state LLC can change its state of organization to Delaware through a statutory conversion under the Delaware Limited Liability Company Act. The conversion requires a plan of conversion custom-drafted to comply with both Delaware law and the laws of the state the LLC is leaving, along with coordinated filings in both states.

Whether the conversion can proceed depends on the laws of both states. Delaware authorizes inbound LLC conversions, but the state the LLC is leaving must also permit the transaction. 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.

A Delaware LLC conversion preserves the LLC’s existing business identity. The LLC keeps its original formation date, Employer Identification Number, contracts, property, bank accounts, and employment relationships. The conversion changes only the LLC’s legal home state, not the business itself.

Why Business Owners Move LLCs to Delaware

Delaware attracts LLC conversions because of its specialized court system, flexible governance statute, and favorable tax treatment for out-of-state businesses.

Delaware’s Court of Chancery provides a dedicated business court staffed by experienced judges who resolve disputes without juries. Decades of LLC litigation in Delaware have produced a well-developed body of case law, giving business owners predictable legal outcomes for governance disputes.

The Delaware Limited Liability Company Act gives LLC members broad authority to customize their governance structure through the Limited Liability Company Agreement. Members can define management rights, profit distributions, voting procedures, and fiduciary duties with a level of contractual freedom that most states do not match. Delaware also provides 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, which benefits companies whose operations are located elsewhere. Delaware also does not require LLCs to file annual reports, reducing the ongoing compliance burden compared to most other states.

Who Can Convert an LLC to Delaware

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.

Statutory Framework for Delaware LLC Conversion

Delaware’s LLC conversion authority sits within Subchapter II of the Delaware Limited Liability Company Act. Subchapter II contains the provisions governing both inbound and outbound conversions, mergers, and other entity transactions.

The key statutory provisions governing Delaware LLC conversions are:

• 6 Del. C. § 18-214 authorizes non-Delaware entities to convert to Delaware LLCs and specifies the filing requirements for the certificate of conversion and certificate of formation
• 6 Del. C. § 18-214(d) establishes the effective date of the conversion: the date the certificate of conversion and certificate of formation are filed with the Division of Corporations
• 6 Del. C. § 18-216 governs outbound conversions of Delaware LLCs to non-Delaware entities

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, 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. Both sets of requirements must be satisfied before the conversion can take effect.

Documents Required for Delaware LLC Conversion

The Delaware LLC conversion process requires 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. The plan of conversion is the governance document that authorizes the transaction and must be custom-drafted to comply with both Delaware law and the law of the state the LLC is moving from. The plan defines the terms under which the LLC will convert, including how member interests will be treated, what governance documents the converted LLC will adopt, and the effective date of the conversion.
• Certificate of Conversion and Certificate of Formation. Delaware combines its Certificate of Conversion and Certificate of Formation into a single filing packet submitted to the Division of Corporations. The Certificate of Conversion authorizes the conversion, and 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 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 of the LLC’s members (or managers, if manager-managed) formally authorizing the conversion and adopting the Delaware organizational documents as the LLC’s governing documents.

The Certificate of Conversion and Certificate of Formation accept electronic signatures and can be e-filed through the Division of Corporations.

The documents listed above reflect Delaware’s requirements for inbound conversion. The LLC’s current state imposes its own documentation requirements for outbound conversion. Both states’ requirements must be satisfied before the transaction is effective.

How to File a Delaware LLC Conversion

Filing the Certificate of Conversion and Certificate of Formation with the Division of Corporations establishes the LLC as a domestic Delaware entity. Before filing, the LLC should complete several preliminary steps.

• Conduct a preliminary name search with the Division of Corporations to confirm the LLC’s name is available in Delaware (a slight name change may be required if the name is unavailable)
• Obtain a certificate of good standing from the LLC’s current state
• Obtain signatures from all required signatories on the conversion documents

After completing the preliminary steps, the LLC files the combined certificate packet with the Division of Corporations and simultaneously files the required conversion documents with the appropriate office in the state the LLC is leaving.

A Delaware LLC conversion proceeds in several steps, and the total timeline depends on how quickly each participant acts. Business owners must organize necessary information, the service provider prepares conversion documents, the owners approve and sign the documents, and the service provider files them with both state agencies. The conversion becomes effective upon filing the Certificate of Conversion and Certificate of Formation with the Division of Corporations. The Division of Corporations offers expedited processing options for an additional fee, ranging from 24-hour service to one-hour service.

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 charges a filing fee of $330 for inbound conversion. The fee covers the combined Certificate of Conversion and Certificate of Formation filing packet. The 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 of process 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 for consistency and privacy. The cost for a commercial registered agent is typically $100 to $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 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.

Delaware LLC Laws That Apply After the Move

The Delaware Limited Liability Company Act 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. An LLC that converts to Delaware and no longer has to file in its original state will avoid the time and expense of annual compliance filings common in other states. Delaware does charge an annual alternative entity tax of $300, due on or before June 1 each year.

Delaware Limited Liability Company Agreement Requirements

Delaware refers to an LLC’s internal governance document as a Limited Liability Company Agreement. 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; the LLC maintains it 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 for consistency and privacy. The cost is typically $100 to $150 per year.

Legal Effect of Delaware LLC Conversion

A Delaware LLC conversion moves an out-of-state LLC to Delaware. The company otherwise continues its existence as the same entity with the same formation date as the date it was originally formed. The conversion process minimizes disruption and administrative burden compared to other methods for changing a business’s state of domicile.

• Change in governing law. An LLC that converts to Delaware becomes a Delaware LLC governed by Delaware law and receives the commercial benefits that come with Delaware organization. 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.

Moving an LLC Out of Delaware

Delaware permits LLCs to convert out of the state under the Delaware Limited Liability Company Act. An outbound conversion requires filing a Certificate of Conversion from a Delaware LLC to a Non-Delaware Entity with the Division of Corporations. The Division of Corporations charges a filing fee of $250 for the outbound conversion. The destination state will require its own formation and conversion documents and will charge separate filing fees.

The outbound conversion must comply with both Delaware’s requirements and the destination state’s inbound conversion or domestication procedure. Delaware does not require a separate plan of conversion for outbound conversions, but the destination state may impose its own planning requirements.

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 domestication.

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