How to Move an LLC to Washington

An out-of-state LLC can change its state of organization to Washington through statutory LLC conversion. Washington LLC conversion is a legal transaction that changes an LLC’s state of organization, the state whose law primarily governs the company. An out-of-state LLC, also called a foreign LLC, that converts to Washington becomes a Washington LLC governed by the Washington Limited Liability Company Act (Wash. Rev. Code sections 25.15.006 through 25.15.905).

The LLC is otherwise the same business entity before and after the conversion process. Whether the conversion can proceed also depends on the laws of the state the LLC is leaving. To find out whether your LLC qualifies and what the process involves, request a free analysis of your LLC move.

Some states use the name “domestication” for the legal procedure that changes an LLC’s state of organization, also called its “domicile.” In many of those states, a business can complete a domestication to change its domicile or to change its entity type. The same statutory process can accomplish either goal.

Washington uses “conversion” to describe a change in an LLC’s state of organization. Washington also uses “conversion” to describe a change in an entity’s business type; for example, an LLC can convert to a corporation (or vice versa). This article deals with conversions that change an out-of-state LLC into a Washington LLC.

Why Business Owners Move LLCs to Washington

A Washington LLC conversion may make sense if a business owner moves to Washington or if the owners prefer to have Washington law govern the company. An owner might transfer an LLC to Washington for any of the following reasons.

• Networking and owner convenience. A business owner who relocates to Washington may prefer to locate the business in the new home state for simple convenience. An LLC owner who lives in Washington will more easily find nearby professionals familiar with Washington law. This makes it easier for the business to hire qualified attorneys and accountants. State agencies are also more likely to have local offices, allowing for in-person communication when necessary.
• Reducing reporting requirements and fees. Conversion can offer practical benefits like reducing an LLC’s annual filing fees and paperwork burden. An out-of-state LLC that does business in Washington may have to submit annual reports and pay filing fees in both states. If the LLC only does business in Washington, conversion could save time and money by lowering the number of filings.
• Advancing business objectives. Strategic plans can also justify relocation and conversion. A business owner might decide to move the business to Washington to be at the center of the LLC’s focus industry. For example, an LLC domiciled and physically located in Washington may enjoy a competitive advantage over out-of-state businesses if Washington is the heart of the company’s main industry.
• Changing to Washington law. Conversion might help achieve a company’s operational goals. A business that converts to Washington may improve its chance of success if Washington law is better for its business model or long-term strategy. A Washington LLC conversion might also make sense if the members want to adopt operating agreement provisions that Washington allows but the current state does not.

Washington LLC Conversion Requirements

Washington LLC conversion under Wash. Rev. Code section 25.15.436 is not available for every out-of-state LLC. An LLC converting to Washington must comply with both Washington law and the current state’s law. Washington law controls the process and documents filed in Washington and determines the conversion’s legal effects.

The current state’s law governs whether the LLC can convert to Washington (the state must authorize conversion), the content of the written plan of conversion if required, the standard under which the LLC’s members or managers must approve the plan of conversion, and the effective date for the conversion.

Eligibility for Washington LLC Conversion

An LLC considering conversion to Washington must confirm that it is eligible for the process. The principal requirement is that the current state must authorize LLC conversions. Not all states do. The current state may call the process “conversion,” “domestication,” or another name. The important part is that the state must have a statutory procedure that lets an LLC organized in that state change its domicile to a new state.

Business owners must also review the LLC’s certificate of formation and limited liability company agreement (or LLC agreement) to ensure there are no provisions that prevent conversion to a new state. If any restrictions are present, the LLC may need to formally amend the documents to allow the procedure.

An out-of-state LLC must also confirm that Washington lets LLCs engage in the company’s field of business. Washington’s LLC Act generally allows LLCs to pursue “any lawful purpose.” An out-of-state LLC involved in a business that is legal in its current state but not in Washington should not change its domicile to Washington unless it intends to also change the type of business it does.

Washington authorizes professional LLCs (PLLCs), which offer services that require licensing and are subject to legal requirements and limitations. Professional companies considering a change of domicile to Washington should check all Washington licensing requirements before deciding to convert.

Required Documents for Washington LLC Conversion

Washington LLC conversion requires preparing and adopting several documents that must comply with both states’ laws and the LLC’s governing documents. The conversion documents memorialize the terms of the conversion and control the company when the conversion takes effect.

• Plan of Conversion. A Plan of Conversion designed to comply with the requirements of both Washington law and the law of the state that the LLC is moving from. The plan must include the LLC’s current name and business structure, its post-conversion name and business structure, the terms and conditions of the conversion (including how ownership interests convert), and the post-conversion LLC’s organizational documents.
• Washington Articles of Conversion. The Washington Articles of Conversion with all information and any related documents needed for filing with the Corporations Division of the Secretary of State.
• Conversion Document for Filing in Prior State. Depending on state law, this document may be called articles of conversion, statement of conversion, articles of domestication, statement of domestication, certificate of conversion, or a similar term.
• Washington Certificate of Formation. The Washington Certificate of Formation for filing with the Corporations Division of the Secretary of State.
• Washington Limited Liability Company Agreement. A state-specific Limited Liability Company Agreement to properly structure the LLC as a Washington 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 Washington organizational documents as the LLC’s governing documents.

The Articles of Conversion and Certificate of Formation accept electronic signatures under Washington law. The Corporations Division of the Secretary of State allows e-filing for electronically signed Articles of Conversion, but requires a manual (wet) signature for the Certificate of Formation. The Certificate of Formation does not permit e-filing.

Cost of Moving an LLC to Washington

The cost of moving an LLC to Washington 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. Professional preparation and state agency coordination are the primary cost drivers in an LLC conversion. To find out what your specific move will cost, request a free analysis of your LLC move.

In addition to professional service costs, the Washington Secretary of State charges a filing fee of $10.00 for the Articles of Conversion and $180.00 for the Certificate of Formation. The total Washington filing fee for inbound conversion is $190.00. The fees paid to Washington are in addition to any filing fees that must be paid to the LLC’s original state. Most states charge a separate fee for LLCs converting out of state.

Processing Time for Washington LLC Conversion Filings

Washington LLC conversion proceeds in several steps, and the length of the process depends on how long each step takes.

Each step depends on the responsible person’s turnaround time: the business owners’ time to organize the necessary information, the service provider’s time to review the information and prepare the conversion documents, the owners’ time to approve and sign the draft documents (or request revisions), the service provider’s time to file the final conversion documents with state agencies, and the state agencies’ time to accept and process the filed documents.

The conversion becomes effective when the Certificate of Formation becomes effective upon filing with the Washington Secretary of State. For a detailed breakdown of each phase in the conversion timeline, see our guide to LLC conversion process.

Legal Effect of Washington LLC Conversion

Washington LLC conversion moves an out-of-state LLC to Washington. The company otherwise continues its existence as the same entity with the same date of formation. The company expends substantially less time and money on administrative matters compared to other methods for changing a business’s state of domicile. Washington law declares that the legal effects of a conversion to Washington are as follows.

• The LLC’s identity stays the same. An out-of-state LLC that changes its domicile to Washington via conversion remains “for all purposes the same entity that existed before the conversion.” The LLC is still the same company, like a person who moves to a new state. It keeps its Employer Identification Number and continues the same tax-reporting history.
• The LLC retains all of its assets and liabilities. After conversion, an LLC owns all assets and owes all debts and liabilities it had before the conversion. Any real estate the LLC owns before conversion remains the company’s property after conversion with no need to record any new deeds.
• Contracts remain valid and enforceable. The new Washington LLC keeps its contractual rights and duties it had before conversion. The business can preserve its contractual relationships and is still legally entitled to enforce contracts entered into before the conversion.
• Legal actions continue. Conversion does not affect any ongoing lawsuits or other official proceedings involving the LLC. An LLC that changes its name during conversion simply substitutes the new name in any processes that started before the conversion.
• Ownership interests are unaffected. The LLC’s members have the same membership interests in the company after conversion as they had before conversion, unless the members decide otherwise in the plan of conversion.
• The LLC is domiciled in Washington and governed by Washington law. The biggest legal result of conversion is that the LLC is now primarily governed by Washington law. The business must adjust its practices to account for any differences between the LLC laws in Washington and the LLC’s former state. The LLC is also bound by its new, Washington-oriented governing documents adopted during conversion and any other rules in its plan of conversion.
• Business operations continue uninterrupted. A converting LLC continues day-to-day business operations during and after conversion. There is no need for the business to shut down during the conversion and lose income. The business’s employees still work for the same entity, so there’s no need to re-hire.
• Dissolution in the current state is unnecessary. Conversion does not formally terminate the LLC in the original state. Dissolution, liquidation, and winding up affairs are unnecessary. Conversion does not trigger contractual rights that take effect in the event of dissolution, liquidation, or winding up. Filings in the original state are limited to the equivalent of the articles of conversion. Registration as a foreign LLC in the original state is not essential; the company can register as a foreign LLC in the original state if it will still do business there, but it does not have to.

Moving an LLC Out of Washington

Washington permits outbound LLC conversion under Wash. Rev. Code section 25.15.436(1). A Washington LLC can convert to another state’s jurisdiction, provided that the destination state also authorizes the procedure.

Washington Outbound Conversion Requirements

A Washington LLC that converts to another state must file Articles of Conversion with the Washington Secretary of State. The outbound filing must include a Plan of Conversion approved by the LLC’s members or managers. Washington does not require a separate certificate of surrender. The Articles of Conversion complete the Washington side of the transaction. The destination state will require its own formation and conversion documents.

The Articles of Conversion must include.

• a statement that the LLC has been converted into another organization
• the LLC’s new name
• business structure
• new state, the date the conversion is effective under the new state’s law, a statement that the conversion was approved as required by Washington law, a statement that the conversion was approved as required by the new state’s law, and if the converted LLC will not be registered to do business in Washington as a foreign LLC, the converted LLC’s street address and principal office address for service of process

Filing Fees for Moving an LLC from Washington

The Washington Secretary of State charges a filing fee of $10.00 for an outbound Articles of Conversion. The destination state will charge separate filing fees for its formation and conversion documents.

Washington LLC Laws That Apply After the Move

The Washington Limited Liability Company Act (Wash. Rev. Code sections 25.15.006 through 25.15.905) imposes ongoing requirements on all domestic LLCs, including those formed through conversion from another state. An LLC that converts to Washington becomes subject to these obligations immediately upon effectiveness of the conversion.

Washington Annual Report and Compliance Requirements

Washington requires domestic LLCs to file an Annual Report with the Washington Secretary of State by the last day of the LLC’s anniversary month. The filing fee is $60.00 per year. This ongoing reporting requirement is one of the continuing obligations that applies once an LLC converts to Washington. An LLC that converts to Washington and no longer has to file in the original state should account for this annual reporting requirement when evaluating the long-term cost of the move.

Washington Limited Liability Company Agreement Requirements

Washington refers to an LLC’s internal governance document as a “Limited Liability Company Agreement” under Wash. Rev. Code section 25.15.006(7). The Limited Liability Company Agreement governs the LLC’s internal affairs, including the rights and obligations of members and managers, profit distributions, and management structure. The Limited Liability Company Agreement is not filed with the state; it is maintained by the LLC as a private document.

Washington Registered Agent Requirements

Washington LLCs must maintain a registered agent authorized to accept service of process for the company under Wash. Rev. Code section 25.15.006. Washington lets LLCs appoint an officer associated with the company as registered agent. Commercial registered agents, which agree to serve as a company’s registered agent for a fee, promote consistency and convenience and avoid disclosure of member information. Commercial registered agents in Washington typically charge around $100.00 per year.

Washington Member and Manager Protections

Washington law codifies fiduciary duties for members and managers. Under Wash. Rev. Code section 25.15.038, members and managers owe duties of care and loyalty, though the LLC agreement can modify but not eliminate these duties.

Washington also recognizes charging orders as an exclusive remedy for creditors seeking to collect against a member’s personal obligation (Wash. Rev. Code section 25.15.256). Members also have the right to dissociate from an LLC, though the LLC agreement can prohibit dissociation on reasonable conditions (Wash. Rev. Code section 25.15.131 and related provisions).

Alternatives to Washington 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 Washington LLC and merging the out-of-state LLC into it, with the Washington LLC as the surviving entity.

The surviving LLC succeeds to all property, contracts, and obligations of the original LLC by operation of law. For a detailed explanation of how the reorganization process works and how it compares to conversion, see our guide to LLC reorganization.

For a comprehensive state-by-state comparison of LLC conversion and domestication laws across all states, see our guide to LLC conversion by state.