Need to convert your business entity? We take the hassle and uncertainty out of converting your LLC to a S-Corp or C-Corp, or your Corporation to a LLC.
What is an Entity Conversion?
An Entity Conversion changes the type of entity (i.e. Corporation to LLC, or visa-versa) within the same state it is formed. Most businesses (although not all) are either LLC’s or Corporations, and when it makes sense to change it to a different type of entity, you need to convert the entity. The most common types of entity conversions are LLC’s to S-Corporations or C-Corporations, although some business owners desire to change from Corporation to LLC because it’s less expensive to maintain in the long-term or for other legal reasons.
If you want to register your company in another state, that is called a Foreign LLC or Foreign Corporation, not an Entity Conversion. If you want to move your company to another state, that is called a Merger or Domestication, not an Entity Conversion. Finally, if you’re operating a business as a sole proprietorship, and you want to start operating under a corporate entity, you simply want to form a Corporation or form a LLC, depending on your needs. We also have an Entity Selection Tool, if you’re not sure what type of entity you want.
L4SB is proud to provide a low-cost, flat-rate option for Entity Conversion. We work with you, as appropriate, to perform an effective conversion.
Why Do an Entity Conversion?
An Entity Conversion is helpful when the business desires the advantages provided by another entity type, or when trying to avoid disadvantages of their current entity type. The most common reasons to perform an Entity Conversion include:
TAX ADVANTAGES In rare instances, accountants or CPA’s will advise you to “convert to a S-Corporation”. If your company is currently a LLC, and if this is why you are considering an Entity Conversion, please double-check with your accountant or CPA, to make sure they are recommending a “Corporation taxed under Subchapter S” versus “Keeping your LLC, and simply taxing it as a S-Corp”. In rare circumstances, Corporations can provide some tax advantages over LLC’s. REQUEST BY INVESTORS In some instances, we’ve seen investors show preferences towards Corporations versus LLC’s. An Entity Conversion is a great way to convert your LLC to a Corporation, to improve its appeal for investors. Note that we do not recommend an Entity Conversion for this reason, unless you’ve been specifically asked by one or more investors. LONG-TERM SIMPLICITY Corporations are harder (and more expensive) to manage and maintain. Some business owners desire to simplify their lives, by converting their Corporation to a LLC.
The Law 4 Small Business service/ filing fee is $99 + state fees & options.
The options, services, and additional fees include:
Type of conversion desired:
LLC to S-Corp
LLC to C-Corp – (+$100)
Corporation to LLC – (+$100)
Tax Status or Full Entity Conversion:
Full Entity Conversion – (+$100)
Tax Status Conversion Only – (+$0)
Uncertain. Have Tax attorney call before proceeding – (+$169)
Registered Agent Services:
No, I will keep my existing Registered Agent as is – (+$0)
Yes, I require Registered Agent Services – (+$129)
Copy of Latest Articles:
L4SB needs to obtain them from the State – (+$50)
Certificate of Incumbency by L4SB – (+$199)
Digital Certificate – (+$29)
Independent Contractor Agreement – (+$79)
Certificate of Incumbency by Company – (+$39)
Mutual NDA Template – (+$49)
Draft Corporate Resolutions – (+$29)
Paper Delivery vis USPS – (+$25)
Rush Service – (+$150)
One (1) Tax Attorney Consult – (+$150)
One (1) Business Attorney Consult – (+$140)
Corporate Paperwork Package – (+$34/monthly)
You should double-check with your accountant about “converting the entity” versus “converting the tax status”. This is a very easy thing to get confused, and you really want to make sure you’re doing the right thing. One suggestion is to ask your accountant, “You want me to convert my LLC to a Corporation, versus simply have the LLC taxed under Subchapter S?”
If your accountant wants you to be taxed under Subchapter S, and doesn’t care whether you have a LLC or Corporation, then our suggestion is to select Tax Status Conversion Only. This will preserve your entity type, but help you convert the tax status of your organization.
Otherwise, if your accountant does want you to convert the entity type from LLC to Corporation, then select Full Entity Conversion.
If you’re not sure, then we strongly encourage you to select the Not sure. Have tax attorney call before proceeding. option. This is not something you want to screw up.
Not all states permit entity conversion. Specifically, Montana, New Jersey and New York do not have any form of entity conversion option whatsoever. Kentucky doesn’t permit LLC to Corporation conversion, but it does permit Corporation to LLC conversion.
We can help change the tax status of a LLC or Corporation, but we cannot convert the entity type in these states.
If you live in one of these states, and you want a conversion that is not supported, please contact us, since there are other options (i.e. such as a merger to a new entity type).
No. An Entity Conversion assumes you already have a corporate entity (i.e. Corporation or LLC) in place, and you want to change it to something else.
If you are a sole proprietorship, you are “the company.” To start operating as a corporate entity, you need to form a Corporation or form a LLC. If you’re not sure what you want, we encourage you to try our Entity Selection Tool to help you determine the best entity for your needs.
Simply put, L4SB is a law firm. Although we are not licensed in all states, our people are competent, well-trained, and licensed in numerous states. You cannot get the attention-to-detail and professionalism from anyone else. Furthermore, L4SB provides these benefits:
FULL ENTITY CONVERSION Vs. TAX STATUS CHANGE
We understand the difference, and will work with you to do what’s best for you and your company.
We do more than simply send out an Articles of Conversion. We work with you to make sure you have the right documents necessary for your final entity. That includes Bylaws / Shareholder Agreement (for LLC to Corporation Entity Conversion) or a high-quality, highly customized Operating Agreement (for Corporation to LLC Entity Conversion).
EXPEDITED HANDLING AVAILABLE
Need an Entity Conversion in a hurry? When you expedite, we pay the state rush fees and mail documents using overnight delivery. Depending on how quickly you can turn around information to us, your Entity Conversion can usually be handled within a matter of days or a week at most.
The Law 4 Small Business Difference
We take client satisfaction seriously. We are not in the business of up-selling or pushing services that won’t help you. We work as your partner to get the job you expect done.
SOLUTIONS FOR LONG TERM SUCCESS
L4SB is your long-term partner to help you and your business with the inevitable ups-and-downs, and everything in between.
FLAT-FEES, NO KIDDING
We’re business lawyers, and we understand many small- and medium-sized businesses struggle just to meet payroll, let alone pay for legal services. That’s why we offer a range of flat-rate services, and reasonable hourly rates for everything else.
REAL LAWYERS REAL ADVICE
With over 200 years of combined business law experience, you can count on getting sound advice and solid representation.
Entity Conversion By Law 4 Small Business
At last, an Entity Conversion offering that is customizable, flexible, fast and cost-effective