A Delaware Certificate of Conversion is the state filing that changes a business from one entity type to another — an LLC into a corporation, a corporation into an LLC, a partnership into either, and so on — while preserving the same legal entity throughout. The filing itself is short and costs between $184 and $500 depending on the target entity, but it has to be submitted alongside a formation document for the new entity, and it does not resolve the federal tax and EIN questions the change creates.
What the Certificate Must Contain and What Gets Filed With It
The certificate is a brief document. For a conversion into a Delaware corporation, it states three things: the date and jurisdiction where the converting entity was first formed, its name and entity type immediately before the filing, and the name of the new corporation as it appears in the certificate of incorporation.1Justia. Delaware Code Title 8 265 – Conversion of Other Entities to a Domestic Corporation If the entity changed jurisdictions between formation and conversion, that gets disclosed as well.
The certificate does not stand alone. A companion formation document must be filed at the same time: a certificate of incorporation if the target is a corporation, a certificate of formation if the target is an LLC. The Division of Corporations will not process one without the other.2Delaware Division of Corporations. Certificate of Conversion from a Delaware or Non-Delaware Limited Liability Company to a Delaware Corporation3Delaware Division of Corporations. Conversion of Entity Type4Delaware Division of Corporations. Submitting a Request
Delaware law also allows, but does not require, a plan of conversion. Where the certificate handles the state mechanics, the plan handles the business side: the terms of the conversion, how existing interests will be exchanged for stock or membership interests in the new entity, and any related corporate actions.1Justia. Delaware Code Title 8 265 – Conversion of Other Entities to a Domestic Corporation If a plan is adopted, the certificate must state that its provisions have been approved before the certificate takes effect. For entities with multiple owners or shifting ownership percentages, skipping the plan is risky. It’s the document that spells out who gets what.
Approvals You Need Before You File
The certificate goes nowhere until the entity’s owners have signed off internally. The required approval depends on the entity converting.
A Delaware Corporation Converting Out
The board must first adopt a resolution approving the conversion and specifying what the corporation will become, then recommend it to stockholders. Every stockholder, voting and nonvoting, must receive written notice at least 20 days before the meeting. A majority of the outstanding shares entitled to vote must vote in favor.5Justia. Delaware Code Title 8 266 – Conversion of a Domestic Corporation to Other Entities
One extra requirement: if the corporation is converting into a partnership that will have general partners, every stockholder who will become a general partner must individually approve the conversion on top of the majority vote. General partners face unlimited personal liability, and Delaware will not impose that through a majority vote alone. If no shares have been issued when the board adopts the resolution, no stockholder vote is required.5Justia. Delaware Code Title 8 266 – Conversion of a Domestic Corporation to Other Entities
A Delaware LLC Converting Out
The operating agreement controls. If it specifies how to authorize a conversion, follow those terms. If it is silent on conversions but addresses mergers, use the merger-approval process. If it addresses neither, the default applies: members owning more than 50 percent of the profits interest must approve.6Delaware Code Online. Delaware Code Title 6 Chapter 18 – Limited Liability Company Act
An Outside Entity Converting Into a Delaware Corporation or LLC
The conversion must be approved under whichever law and governing documents apply to the converting entity. The certificate of incorporation for the new Delaware corporation must be approved under that same authorization.1Justia. Delaware Code Title 8 265 – Conversion of Other Entities to a Domestic Corporation For a conversion into a Delaware LLC, the new LLC agreement must be approved by the same authorization required for the conversion itself.7Justia. Delaware Code Title 6 18-214 – Conversion of Certain Entities to a Limited Liability Company
Filing Fees
The state fee depends on the target entity. Under the August 2024 schedule:
- Converting to a Delaware corporation: $184
- Converting to a Delaware LLC: $220
- Converting to a Delaware partnership (general, limited, or LLP): $200
- Converting to a Delaware statutory trust: $500
- Converting a Delaware entity to a non-Delaware entity: $220 to $234, depending on the original entity type
These figures cover only the certificate of conversion. A separate fee applies to the companion certificate of incorporation or certificate of formation filed at the same time, and a Delaware entity converting out may owe an additional franchise tax payment.8Delaware Division of Corporations. Corporate Fee Schedule
Expedited Processing
Standard filings are processed in order received. Paid expedited service is available, and the surcharge is charged per document, so filing a certificate of conversion and a certificate of incorporation together means paying the surcharge twice:
- Next-day service: $50 to $100 (received by 7:00 PM ET)
- Same-day service: $100 to $200 (received by 2:00 PM ET)
- Two-hour service: $500 (received by 7:00 PM ET)
- One-hour service: $1,000 (received by 9:00 PM ET)
What Carries Over After Conversion
The converted entity is treated, for all purposes of Delaware law, as the same entity that existed before.1Justia. Delaware Code Title 8 265 – Conversion of Other Entities to a Domestic Corporation That continuity is the whole point of using a conversion instead of dissolving and reforming.
Property stays vested: real estate, personal property, receivables, and causes of action all remain with the entity. Deeds do not revert. Creditor rights and liens survive without interruption. Debts and liabilities incurred before conversion remain attached to the converted entity.7Justia. Delaware Code Title 6 18-214 – Conversion of Certain Entities to a Limited Liability Company Contracts, leases, and licenses carry forward without renegotiation because the counterparty is dealing with the same legal entity, restructured.
Personal liability that existed before the conversion is not erased. A general partner who was personally liable for a partnership debt remains personally liable after the partnership converts into an LLC.1Justia. Delaware Code Title 8 265 – Conversion of Other Entities to a Domestic Corporation The liability protections of the new form apply prospectively.
Internal governance has to change to fit the new form. An LLC becoming a corporation replaces its LLC agreement with bylaws, a board of directors, and officers. A corporation becoming an LLC replaces bylaws and board structure with an operating agreement. These documents are not filed with the state, but they need to be in place when the conversion takes effect.
Federal Tax and EIN: Not Handled by the State Filing
The Delaware filing changes your entity type under state law. It does not change your federal tax classification, and it does not tell the IRS anything. This is where owners get tripped up.
When a multi-member LLC taxed as a partnership converts to a corporation, the IRS treats the transaction as a transfer of assets and liabilities to the new corporation in exchange for stock. Under Section 351 of the Internal Revenue Code, that transfer is tax-free as long as the contributors own at least 80 percent of the corporation’s stock immediately after the exchange.10Internal Revenue Service. Revenue Ruling 2003-51 – Section 351 Transfer to Corporation Controlled by Transferor A leveraged business needs to watch the interaction with Section 357: if the corporation assumes liabilities exceeding the owners’ total basis in the contributed assets, the excess is treated as taxable gain.11Office of the Law Revision Counsel. 26 USC 357 – Assumption of Liability
Some conversions require Form 8832, the Entity Classification Election, to notify the IRS of the change. Its effective date cannot be more than 75 days before or 12 months after the filing date.12Internal Revenue Service. Form 8832 – Entity Classification Election If the goal is S-corporation status for the new corporation’s first tax year, Form 2553 is a separate filing and must generally be submitted within 75 days of the conversion’s effective date.
Whether You Need a New EIN
The general rule is that a change in business structure requires a new EIN. In practice:
- An LLC changing only its tax election, without a state-level conversion, keeps its EIN.
- A partnership converting to a corporation at the state level needs a new EIN.
- A corporation converting to a partnership or sole proprietorship needs a new EIN.
- A corporation that converts at the state level without changing its business structure keeps its EIN.
- A partnership converting to an LLC that is still classified as a partnership keeps its EIN.
A new EIN means new bank accounts, updated tax and payroll records, and revised vendor paperwork. Confirming which side of that line you land on before filing avoids weeks of cleanup after.13Internal Revenue Service. When to Get a New EIN
What Goes Wrong
The certificate itself is short enough that filing errors are rare. Problems come from the steps around it. The most serious is filing without the required member or stockholder approval, which leaves the conversion open to challenge. For corporations, missing the 20-day notice to nonvoting stockholders is a common oversight that can invalidate the vote.
The other pattern is treating the state filing as the finish line. Owners who file the certificate but skip Form 8832, miss the S-election window, or fail to apply for a new EIN when one is required end up with state and federal records that do not match, and reconciling them takes months. Delaware’s part is clean; the federal side is on you.