LLC domestication—known in some states as LLC conversion1—is usually the most efficient way to fully transfer an LLC from one state to another.2 Compared to other alternatives, LLC domestication provides the most seamless method to change the law that applies to an LLC without disrupting business operations.
The domestication or conversion process includes at least three different parties:
- The document preparer;
- The business owners/managers; and
- The state agencies.
The length of the LLC domestication or conversion process depends on how long it takes each party to the process to fulfill its respective role.
The Document Preparer’s Role in the LLC Domestication Process
As explained in our discussion of LLC domestication costs, the LLC domestication process is labor-intensive. It requires someone to prepare the documents necessary for the domestication, communicate with the state agencies, and coordinate the domestication process. If the preparer is unfamiliar with LLC domestication or does not properly manage his or her caseload, the preparer’s turnaround time can lengthen the LLC domestication process.
As the document preparer in this process, we work hard to prepare and return documents quickly. Absent unusual circumstances, we turn around all documents within a week of the date that we receive the information required, often much sooner. We also communicate promptly with state agencies and business owners and managers.
The Business Owner’s and Manager’s Role in the LLC Domestication Process
The owners and/or managers of the LLC provide information, review and sign documents, and act on behalf of the LLC. Once the preparer—or, in some cases, a state agency—delivers a document to the owners or managers for review and signature, progress on the LLC domestication usually stops until the owner or manager is able to complete the review and sign the documents.
The State Agencies’ Role in the LLC Domestication Process
Documents must be filed with the Secretary of State (or corresponding governmental division) for the state or commonwealth that the LLC is moving from and the corresponding agency for the state or commonwealth that the LLC is moving to. Although some state agencies offer expedited services for an additional fee, in most cases, the LLC domestication process will involve waiting on the agency to assign an examining agent. Once that happens, the agent reviews the document and either accepts it or asks for small modifications.
State agency response times have been unpredictable since the beginning of the COVID pandemic but have improved in recent months. Still, most businesses can expect a wait of at least a few weeks before hearing back from the state agency.
- Of the 37 states with statutory procedures for changing the jurisdiction of an LLC, 23 use the term domestication and 14 use the term conversion.
- The following states have LLC conversion or domestication statutes permitting LLCs to move to another state: Alaska (Alaska Stat. § 10.55.501), Arizona (Ariz. Rev. Stat. § 29-2501), California (Cal. Corp. Code § 17710.02), Colorado (Colo. Rev. Stat. § 7-90-201(2)), Connecticut (Conn. Gen. Stat. § 34-641), Delaware (6 Del. C. § 18-216), District of Columbia (D.C. Code § 29-809.06(a)), Florida (Fla. Stat. § 605.1041), Georgia (O.C.G.A. § 14-11-906), Idaho (Idaho Code § 30-22-501), Illinois (805 ILCS 415/301), Indiana (Ind. Code § 23-0.6-5-1),. Iowa (Iowa Code § 489.1010), Kansas (Kan. Stat. Ann. § 17-78-501), Louisiana (La. Stat. Ann. § 12:1308.3), Maine (31 M.R.S. § 1645), Massachusetts (Mass. Gen. Laws ch. 156D, § 9.20), Michigan (MCL § 450.4708), Minnesota (Minn. Stat. § 322C.1011), Mississippi (Miss. Code Ann. § 79-37-501), Nebraska (Nebraska Revised Statute 21-179), Nevada (NRS 92A.105), New Hampshire (RSA 304-C:205), New Jersey (New Jersey Revised Statutes §§ 42:2C-82), North Carolina (N.C.G.S. § 57D-9-30)
North Dakota (N.D. Cent. Code § 10-32.1-67), Ohio (R.C. 1705.361 and 1705.371), Oregon (Or. Rev. Stat. § 63.470), Pennsylvania (15 Pa. Code § 371), South Dakota (South Dakota Codified Laws 47-34A-910), Texas (Tex. Bus. Orgs. Code Ann. § 10.101 et seq.), Utah (Utah Code § 48-3a-1051), Vermont (Vt. Stat. tit. 11, § 4152), Virginia (Code of Virginia § 13.1-1074), Washington (RCW 25.15.436), Wisconsin (Wis. Stat. § 178.1151), and Wyoming (W.S. § 17-29-1012).