Have you been thinking about Converting a Delaware LLC to C Corp but want to know what all is involved? When you do your research, do you come across conflicting information? At the Corporation Center, our main goal is to make it easy for folks to find all of the documentation they need to start a business entity where and how they want. That said, we also want our site to be a resource, somewhere people can go to not just find corporate documents, but to find the right corporate documents.
Important Steps to Take in Delaware
Delaware, compared to other states, has fewer necessary steps to be able to convert an LLC to a C Corp. That said, you will have to make sure that you’re in compliance throughout the process not just with Delaware laws but with your LLC operating agreement as well. In regards to those conversion procedures not addressed by your LLC operating agreement, Delaware laws for LLC conversion apply.
Multiple Ways to Convert
The two most commonly used methods of conversion in Delaware are the “Statutory Merger” and the “Statutory Conversion.” In terms of the former, before your LLC’s liabilities and assets can be transferred over, you will have to create a whole new corporation. For a Statutory Conversion, however, you won’t have to create a new entity. Instead, there will be an automatic transfer of your LLC’s liabilities and assets. If you have any questions about how this works, you’re welcome to call our live agents.
LLC Members Do Have to Vote on the Conversion, But…
Yes, in accordance with Delaware laws, LLC members will have to vote to approve the conversion. But, those laws don’t stipulate which proportion of your LLC members have to vote in order for it to be legally approved. In fact, those don’t even state that you have to notify LLC members about any meeting to approve a conversion. Now, obviously, if your operating agreement does have language addressing these issues, follow that.
However, if not, you can determine how many have to vote for this conversion to go through (a majority? A plurality? 40%? Or…?) Delaware, for the most part, is “hands off” when it comes to business entities.
Once You’re Done Converting a Delaware LLC to C Corp
The above just covers specific Delaware rules about LLC to C Corp conversion. Beyond that, you’ll have to complete all of the tasks that come with starting a new corporation and keeping it running. So, you’ll have to create a shareholders agreement, draft some corporate bylaws, appoint corporate directors and elect corporate officers, hold an initial board meeting, file an annual report with the state, and so forth.
Start Your Corporation Where and How You’d Like
Of course, an LLC and C Corp aren’t the only two options when it comes to forming a business entity in Delaware. You can form a Partnership, Limited Partnership, Limited Liability Partnership, and Limited Liability Limited Partnership, among others. To see all of the ways we can help, click here.