Corporation-to-LLC Statutory Conversion Approval and Filing Requirements in California
At a glance
| Governing law, entity types, domestic/foreign status, and direct-conversion scope | Cal. Corp. Code ch. 11.5, §§ 1150-1159, plus LLC articles §§ 17702.01 and 17702.05; domestic stock corporation may convert to a domestic or foreign LLC, subject to destination and other applicable law (§§ 1151-1152) |
|---|---|
| Direct route, destination LLC, and substitute-merger boundary | Direct statutory conversion available; destination law must expressly permit formation by conversion and all other applicable conversion requirements must be met. This route is not a substitute-merger prescription (§ 1151) |
| Plan terms, required contents, and resulting LLC governing documents | Required plan states terms; resulting name/form/jurisdiction; share-to-interest conversion; LLC articles/certificate and operating agreement; required or desired provisions. Non-dissenting holders become parties to adopted governing documents; LLC keeps plan and supplies copies on request (§ 1152(a), (d), (g)) |
| Board adoption, recommendation, conditions, and authority | Board approves plan; board and outstanding-share approval may occur in either order. Principal-term amendment requires board plus same shareholder approval; board or shareholders may abandon before effectiveness using the applicable approval method, subject to third-party contract rights (§§ 151, 1152(b), (e)-(f)) |
| Shareholder vote, class/series groups, written consent, and unanimity | Majority of outstanding shares of every class, plus greater articles/division threshold; close corporation defaults to two-thirds of each class but articles may lower to no less than majority. Written consent uses meeting-equivalent votes unless articles provide otherwise; no express no-issued-shares exception (§§ 152, 603, 1152(b)) |
| Notice, nonvoting holders, and consent to new personal liability | Meeting notice to voting holders is 10-60 days (30 if third-class mail) and states conversion's general nature unless approval unanimous; less-than-unanimous written consent generally gets ≥10-day pre-consummation notice. Each holder becoming an LLC manager approves unless dissent rights apply; no general nonvoter notice stated (§§ 601, 603, 1152(c)) |
| Conversion and LLC formation filings, signer, and contents | Domestic-LLC statement of conversion is completed on LLC articles; converting officers execute/acknowledge. Filing states corporation name/file number, class votes and required percentages, destination name/form/jurisdiction, and agent; LLC articles add purpose, name, addresses, agent, and management statements (§§ 1153, 1155, 17702.01) |
| Fees, delayed effectiveness, abandonment, withdrawal, and correction | Current LLC-1A stock-corporation-to-LLC filing fee $150; conversion effective on required filing, and original LLC articles cannot specify the general ≤90-day delayed date. Plan may be amended or abandoned before effectiveness; no separate conversion-specific postfiling withdrawal or correction in ch. 11.5 (§§ 1152(e)-(f), 1153, 17702.05(c); SOS fee table) |
| Property, contracts, debts, proceedings, owner interests, and continuity | Same entity except specified California tax-law purposes; rights/property vest, debts/liabilities continue, creditor rights/liens remain unimpaired, and proceedings continue. Preconversion personal liability remains; postconversion liability follows resulting interest/law/documents. Conversion filing replaces separate dissolution filings; known creditors/claimants get notice within 90 days (§§ 1155(d), 1158) |
| Tax, licensing, contract, creditor, securities, and foreign-qualification boundaries | Converted entity assumes specified California corporate-tax return/payment duties; same-entity rule expressly excludes named tax-law parts. Destination law and foreign filings still govern; continuity does not promise tax-free treatment, license/contract consent, securities compliance, creditor priority, or foreign qualification (§§ 1151(b), 1153(a), 1155(e), 1158) |
Requirements one by one
Direct route, plan, and approvals
California permits a corporation to convert directly into a domestic or foreign LLC only when the destination law expressly permits formation by conversion and the corporation meets every other applicable requirement. Equal treatment of a class or series and conversion of nonredeemable common shares into nonredeemable equity interests are defaults subject to the statute's all-holder consent exceptions. Cal. Corp. Code §§ 1150-1151.
The required plan states the conversion terms; the LLC's name, form, and jurisdiction; the share-to-interest mechanics; and the articles or certificate of formation and operating agreement. Non-dissenting shareholders become parties to the adopted governing documents at effectiveness even if they did not sign them. The resulting LLC keeps the plan at its statutory records office and promptly supplies a requested copy at its expense; waiver of that copy right is unenforceable. Cal. Corp. Code § 1152(a), (d), (g).
The board approves the plan, and a majority of the outstanding shares of each class approves its principal terms unless the articles or another provision requires more. A close corporation instead defaults to two-thirds of each class, but its articles may reduce that threshold no lower than a majority. Board and holder approval may occur in either order. Cal. Corp. Code §§ 151- 152, 1152(b).
Notice, consent, amendment, and abandonment
Meeting notice to holders entitled to vote is ordinarily 10 to 60 days, or at least 30 days if sent by third-class mail. Unless voting approval is unanimous, the notice or waiver must state the general nature of the conversion. The statute states no general conversion notice to nonvoting holders. Cal. Corp. Code § 601(a), (f).
Unless the articles say otherwise, written consent may use the same minimum votes as a meeting where all entitled shares are present. When all entitled holders were not solicited, less-than-unanimous approval under § 1152 generally requires notice at least 10 days before consummation. Consent may be revoked only before the required consents are filed with the corporate secretary. Cal. Corp. Code § 603(a)-(c).
Each shareholder who will become an LLC manager under the plan separately approves unless the shareholders have the conversion dissent rights. A plan amendment changing principal terms requires board and the same shareholder approval as the original. Before effectiveness, the board or shareholders may abandon through the method applicable to their approval, subject to third-party contract rights. Cal. Corp. Code § 1152(c), (e)-(f).
Conversion filing, effect, and continuity
For a domestic LLC, the conversion statement is completed on the LLC's articles of organization. The converting corporation's officers execute and acknowledge the statement, which identifies the corporation and file number, each voting class and required percentage, the resulting LLC, and its process agent. The articles also carry the LLC's lawful-purpose statement, name, principal and mailing addresses, agent, and manager-management statements. Cal. Corp. Code §§ 1153, 1155, 17702.01.
The Secretary of State's current forms table lists the stock-corporation-to-LLC Articles of Organization—Conversion as Form LLC-1A with a $150 filing fee. Original articles are excluded from the general delayed-effective-date option, so the LLC forms and the conversion becomes effective upon the required filing. Cal. Corp. Code §§ 1153, 17702.01(d), 17702.05(c).
The converted LLC is the same entity except for the statute's specified California tax-law purposes. Rights and property vest in it, debts and liabilities continue, creditor rights and liens remain unimpaired, and pending proceedings continue. The conversion filing replaces separate election and dissolution certificates; the resulting entity assumes specified corporate-tax return and payment duties. Known creditors and claimants in the records receive mailed conversion notice within 90 days, but omission does not invalidate the conversion. Shareholders receive the reorganization-equivalent dissent rights stated in Chapter 13. Cal. Corp. Code § 1155(d)-(e). Cal. Corp. Code §§ 1158-1159.
What trips people up
The operating agreement is not merely a later LLC document. It is part of the required conversion plan, and non-dissenting shareholders become parties to the adopted governing documents at effectiveness whether or not they signed them. Cal. Corp. Code § 1152(a), (d).
California uses the LLC articles themselves for the domestic conversion statement. The general 90-day delayed-date option expressly excludes original articles of organization. Cal. Corp. Code §§ 1155(a)(3), 17702.05(c).
Common questions
Does every shareholder have to approve?
Not ordinarily. The baseline is approval by a majority of each outstanding class, subject to greater requirements and the close-corporation rule. A holder who will become an LLC manager separately approves unless the dissent-rights exception applies. Cal. Corp. Code §§ 152, 1152(b)-(c).
Is a separate certificate of conversion filed for a domestic LLC?
No. The conversion statement is completed on the resulting LLC's articles of organization. Cal. Corp. Code § 1155(a)(3).
Does continuity guarantee tax-free treatment or contract consent?
No. The same-entity provision expressly carves out specified California tax-law purposes, and the conversion chapter still requires compliance with other applicable law. Statutory continuity does not supply a contract, lender, license, securities, or tax conclusion. Cal. Corp. Code §§ 1151(b), 1158(a).
Statutes and sources
- Cal. Corp. Code §§ 1150-1152 define and authorize the route and govern the plan, approvals, governing documents, amendment, abandonment, and records. Accessed September 5, 2026.
- Cal. Corp. Code §§ 151-152, 601, and 603 define board and outstanding-share approval and govern meeting and consent notice. Accessed September 5, 2026.
- Cal. Corp. Code §§ 1153, 1155, and 1158-1159 govern filings, effectiveness, tax duties, continuity, liability, creditor notice, and dissent rights. Accessed September 5, 2026.
- Cal. Corp. Code §§ 17702.01 and 17702.05 govern LLC article contents, formation, and delayed effectiveness. Accessed September 5, 2026.
- California Secretary of State LLC forms and fees lists the corporation-to-LLC LLC-1A filing and current $150 fee. Accessed September 5, 2026.
Source links
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