This article discusses the process for moving an LLC to or from New York. Unlike many states, New York does not have a statutory domestication or conversion procedure for limited liability companies. There is no provision in New York law that allows a foreign LLC to become a New York LLC—or a New York LLC to become governed by another state’s law—through a direct transfer of jurisdiction.
This means that moving an LLC to or from New York requires a statutory reorganization: forming a new LLC in the target jurisdiction and merging the existing LLC into it. The surviving entity emerges governed by the target state’s law, with full continuity of contracts, assets, liabilities, and business history. New York authorizes cross-state mergers, which provides the legal framework for these reorganization transactions.
Why Can’t I Just Convert My LLC?
Many states allow LLCs to change their state of organization through a streamlined process called conversion or domestication. A business owner in one of those states can file conversion documents with both states and emerge with the same LLC governed by a different state’s law. The process is straightforward and preserves the LLC’s legal identity without forming a new entity.
New York’s Limited Liability Company Law does not include this type of procedure. The statute provides for foreign LLC registration (allowing an out-of-state LLC to do business in New York) and for mergers between domestic and foreign LLCs, but it contains no mechanism for a direct change of domicile. As a result, even if the other state involved in the transaction has a conversion or domestication statute, that procedure cannot be used when New York is on either side of the move.
The merger-based reorganization described in this article achieves the same practical result. The LLC’s business continues uninterrupted, and the surviving entity succeeds to all property, contracts, and obligations of the original LLC by operation of law.
What Laws Govern New York LLC Reorganizations?
Moving an LLC to or from New York requires consideration of two sets of laws: New York law and the other state’s law. New York’s legal requirements are outlined in the New York Limited Liability Company Law, codified at N.Y. Ltd. Liab. Co. Law §§ 101 through 1403.
New York’s merger provisions are found in Article 10 of the Limited Liability Company Law. Section 1001 authorizes mergers between two or more domestic LLCs, and also permits a domestic LLC to merge with one or more foreign LLCs if the laws of the foreign jurisdiction authorize the merger. Section 1002 sets forth the requirements for the agreement of merger, and Section 1003 governs the certificate of merger that must be filed with the New York Department of State. Section 1004 specifies the legal effects of the merger.
The other state’s laws will determine additional requirements, including whether the transaction can proceed, the contents of any plan or agreement of merger required by that state, the approval standard for the merger, and the documents that must be filed with that state’s filing office.
Before You Begin
Business owners should consider the following questions before starting a merger-based reorganization:
- Does the other state allow the merger? New York permits cross-state mergers, but the other state must also authorize the transaction. Business owners should confirm that the other state’s LLC statute permits mergers with foreign LLCs.
- Do the LLC’s governing documents allow the merger? Business owners must review the LLC’s certificate of formation (or articles of organization) and operating agreement to ensure there are no provisions that prevent a merger or impose special requirements. If any restrictions are present, the LLC may need to formally amend the documents before proceeding.
- What approval is required? Under New York law, the agreement of merger must be approved by members holding a majority of the membership interests entitled to vote, unless the operating agreement specifies a different threshold. The other state’s law will also impose approval requirements.
- Is the LLC in good standing? Confirm that the LLC is current on any state tax obligations and filings. While New York does not require a certificate of good standing for merger filings, unresolved compliance issues can complicate the transaction.
How to Move an LLC to New York
Because New York does not permit inbound domestication or conversion, an out-of-state LLC must use a two-step statutory reorganization to become a New York LLC: (1) form a new New York LLC, and (2) merge the out-of-state LLC into it, with the New York LLC as the surviving entity.
Note: Even if the originating state offers outbound conversion or domestication, that procedure cannot be used to move to New York because New York has no corresponding inbound statute to receive the converting entity.
Step 1: Form a New York LLC
File Articles of Organization with the New York Department of State. This newly formed entity will serve as the surviving LLC after the merger. At this stage, the New York LLC can be structured as a shell entity—its operating agreement and membership structure will be established or amended as part of the merger process.
Step 2: Merge the Out-of-State LLC into the New York LLC
The merging entities must adopt an agreement of merger and file a certificate of merger with the New York Department of State. The merger becomes effective upon filing of the certificate of merger, unless a later effective date (not to exceed 90 days) is specified in the certificate.
Agreement of Merger
The agreement of merger must include:
- The name and jurisdiction of formation of each LLC that is a party to the merger;
- The name of the surviving LLC (the New York LLC);
- The terms and conditions of the merger;
- The manner and basis of converting membership interests in the non-surviving LLC into membership interests, cash, or other consideration in the surviving LLC; and
- Any amendments to the articles of organization of the surviving LLC to be effected by the merger.
The agreement of merger must be approved by each LLC that is a party to the merger, in accordance with its governing law and operating agreement. For the New York LLC, approval requires members holding a majority of the membership interests entitled to vote, unless the operating agreement specifies otherwise. For the out-of-state LLC, approval must comply with that jurisdiction’s LLC statute and the entity’s operating agreement.
Certificate of Merger
After the agreement of merger is approved, file a certificate of merger with the New York Department of State. The merger becomes effective upon filing, and the out-of-state LLC ceases to exist. The surviving New York LLC succeeds to all property, rights, and obligations of the merged entity by operation of law.
Coordinating with the Originating State
The requirements above address only the New York side of the transaction. The originating state will have its own requirements for approving and effectuating the merger. These typically include filing a certificate or articles of merger, obtaining member approval under that state’s LLC act, and satisfying any tax clearance requirements. In most states, the merger will terminate the out-of-state LLC’s existence by operation of law, though some jurisdictions require a separate certificate of dissolution or cancellation.
How to Move an LLC Out of New York
Because New York does not permit outbound domestication or conversion, a New York LLC must use a statutory reorganization to become governed by another state’s law: (1) form a new LLC in the destination state, and (2) merge the New York LLC into it, with the destination-state LLC as the surviving entity.
Note: Even if the destination state offers inbound conversion or domestication, that procedure cannot be used when leaving New York because New York has no corresponding outbound statute.
Step 1: Form an LLC in the Destination State
Form an LLC under the laws of the destination state. This newly formed entity will be the surviving LLC after the merger. The formation requirements will be determined by the destination jurisdiction. The new LLC can be structured as a shell entity at this stage.
Step 2: Merge the New York LLC into the Destination-State LLC
The New York LLC merges into the newly formed out-of-state LLC, with the out-of-state LLC designated as the surviving entity. Upon effectiveness, the New York LLC ceases to exist, and its members become members (or receive the consideration specified) in the surviving entity.
Agreement of Merger
The agreement of merger follows the same requirements as an inbound merger. It must identify the merging entities, designate the out-of-state LLC as the surviving entity, specify the manner and basis for converting membership interests, and include any necessary amendments to the surviving entity’s organizational documents. The agreement must be approved by the members of each LLC as required by their governing laws and operating agreements.
Certificate of Merger
File a certificate of merger with the New York Department of State. The merger becomes effective upon filing, unless a later effective date is specified. New York does not require a separate certificate of cancellation or surrender when a New York LLC is merged out of existence—the filing of the certificate of merger terminates the New York LLC’s existence.
Coordinating with the Destination State
The requirements above address only the New York side of the transaction. The destination state will have its own requirements for the LLC formation and inbound merger. These typically include filing articles of organization (or equivalent) and a certificate or articles of merger, and satisfying any approval, notice, or tax clearance requirements under that jurisdiction’s LLC act.
What is the Legal Effect of the Merger?
A merger-based reorganization preserves business continuity. The surviving LLC succeeds to the original LLC’s existence, and the company’s business continues without interruption. The merger has the following legal effects:
- Cessation of non-surviving entity. The separate existence of the non-surviving LLC ceases upon effectiveness of the merger.
- Succession to rights and powers. The surviving LLC possesses all rights, privileges, powers, and franchises of the merged entity.
- Automatic property transfer. All property and debts of the merged entity vest in the surviving LLC by operation of law. There is no need to create deeds or transfer instruments—the transfer is automatic.
- Continued liabilities. The surviving LLC is liable for all obligations of the merged entity. Liens and security interests on property of the merged entity are unaffected.
- Unimpaired contracts. The surviving LLC is a party to the same contracts and has the same contractual rights and obligations as the merged entity.
- Legal proceedings. No existing claim or pending action against the merged entity is abated. The surviving LLC continues as the party to any proceeding, and there is no need to substitute parties.
- Conversion of equity. Membership interests in the non-surviving LLC are converted into membership interests, cash, or other consideration in the surviving LLC as provided by the agreement of merger.