The legal process of changing a company’s entity type or state of formation—such as converting an LLC to a Corporation or moving a Delaware company to another state—while maintaining business continuity.
What is Conversion?
Conversion refers to the formal, legal process of changing a company’s structure or jurisdiction without dissolving and re-forming the business. In the U.S., this can mean converting an LLC to a Corporation (or vice versa) or changing the company’s home state of registration—for example, from Delaware to Wyoming. For non-U.S. founders, conversion offers a streamlined way to adapt the company to evolving needs (such as raising investment or optimizing taxes) while preserving its history, EIN, bank accounts, and contracts.
There are two main types of conversions:
- Entity Type Conversion – Changing the legal structure of the business (e.g., from an LLC to a C Corporation).
- State (or Jurisdictional) Conversion – Moving the legal home of the business to a different state (e.g., from Delaware to Florida).
The conversion process is highly state-specific. Some states, like Delaware and Texas, allow for “statutory conversions,” which are straightforward and legally recognized transitions. Others may not support direct conversion, in which case a company may need to dissolve and re-register, or use a more complex procedure like a merger or domestication.
A key advantage of conversion is continuity. The business retains its EIN, tax history, contracts, and operational setup, minimizing disruption. This is particularly important for non-U.S. residents who may not want to undergo the hassle of reapplying for a bank account, redoing IRS paperwork, or informing vendors and partners of a new legal entity.
Conversion is commonly used when:
- A startup initially forms an LLC but wants to convert to a C Corporation to raise venture capital.
- A company wants to relocate from one state to another for regulatory or tax advantages.
- A foreign-owned U.S. business changes structure to better align with growth plans, investor requirements, or operational goals.
The process typically requires filing a Certificate of Conversion, along with a new Certificate of Formation/Incorporation in the target state or entity type. It may also involve amending the operating agreement or bylaws and notifying the IRS of the change.
In summary, conversion gives flexibility to evolving businesses by allowing structural or jurisdictional changes without starting from scratch. For international founders operating U.S. companies, it’s a strategic tool for adapting to new legal, financial, or operational needs—while preserving the business’s continuity and credibility.
