Corporation-to-LLC Statutory Conversion Approval and Filing Requirements in Texas
At a glance
| Governing law, entity types, domestic/foreign status, and direct-conversion scope | Texas Business Organizations Code chs. 3, 4, 6, 10, and 21; domestic for-profit corporation may convert directly to domestic LLC or foreign LLC/non-code organization when destination law permits (§§ 10.101, 21.453) |
|---|---|
| Direct route, destination LLC, and substitute-merger boundary | Direct statutory route available; conversion cannot conflict with destination-jurisdiction law, and destination formation must comply with that law. Asset disposition is expressly not a merger or conversion (§§ 10.101(d), 10.254) |
| Plan terms, required contents, and resulting LLC governing documents | Written plan states converting/resulting names, continued existence, resulting type/jurisdiction, interest conversion, and LLC formation certificate; external facts permitted if operation is clearly stated. Plan may authorize resulting-LLC actions without further manager/member approval (§§ 10.101, 10.103-.106) |
| Board adoption, recommendation, conditions, and authority | Board adopts resolution approving plan and recommends approval or submits without recommendation and explains why; may condition shareholder submission. Later may recommend rejection, and plan may require submission despite that recommendation (§ 21.453) |
| Shareholder vote, class/series groups, written consent, and unanimity | Default two-thirds of outstanding shares entitled to vote plus two-thirds of each required class/series; separate group for converted/exchanged, amendment-equivalent, or certificate-entitled class/series. Unanimous written consent always available; certificate may authorize meeting-threshold consent with prompt nonconsenter notice (§§ 6.201-.205, 21.457-.458) |
| Notice, nonvoting holders, and consent to new personal liability | Meeting notice to every voting and nonvoting shareholder at least 21 days before meeting, with plan/copy or summary and dissent notice. A holder cannot become subject to owner liability through conversion without that holder's consent (§§ 10.101(c), (f), 21.456) |
| Conversion and LLC formation filings, signer, and contents | Converting entity signs conversion certificate containing plan or entity/jurisdiction, plan-location/copy, and approval recitals; resulting LLC certificate filed simultaneously. LLC certificate identifies conversion predecessor and adds name/type/purpose, registered office/agent, mailing address, and managers or members; no organizer listed for conversion (§§ 3.005-.006, 3.010, 10.154-.155) |
| Fees, delayed effectiveness, abandonment, withdrawal, and correction | $300 conversion fee plus $300 domestic-LLC formation fee; default filing effectiveness or stated date/time/future event no later than day 90 after signing. Plan may be abandoned before effect; after filing, certificate of abandonment required (§§ 4.051-.057, 4.151-.154, 10.201-.203) |
| Property, contracts, debts, proceedings, owner interests, and continuity | Entity continues without interruption; property/title remain without transfer, debts/liabilities continue, creditor/owner-liability rights survive, proceedings continue without substitution, and interests convert under plan or dissent route. New owner liability for old obligations follows written agreement, prior liability, or applicable law (§§ 10.101(e)-(f), 10.106) |
| Tax, licensing, contract, creditor, securities, and foreign-qualification boundaries | Filing rejected unless franchise taxes paid or resulting entity accepts liability; creditor and antitrust rights preserved. Destination law controls foreign effect. Statutory continuity does not promise tax treatment, license/contract consent, securities compliance, creditor priority, or foreign qualification (§§ 10.101(d), 10.156, 10.901) |
Requirements one by one
Direct route, plan, and approvals
Texas permits a domestic corporation to convert directly into a domestic LLC or a foreign LLC treated as a non-code organization. The conversion cannot be prohibited by or inconsistent with destination law, and formation must comply with that law. Tex. Bus. Orgs. Code § 10.101(a), (d).
The written plan names both entities, says the corporation continues in the LLC form, identifies the resulting type and jurisdiction, states the interest- conversion method, and includes the resulting certificate of formation. Its terms may depend on outside facts if their operation is clearly stated. A resulting-LLC action included in a properly approved plan may be treated as approved without further manager or member action. Tex. Bus. Orgs. Code §§ 10.101, 10.103-.106.
The board approves and recommends the plan or submits it without a recommendation and tells shareholders why. It may condition submission. The board may later recommend rejection, while the plan itself may require shareholder submission despite that recommendation. Tex. Bus. Orgs. Code § 21.453.
The ordinary threshold is two-thirds of all outstanding shares entitled to vote plus two-thirds of each required class or series. A converted or exchanged class, amendment-equivalent class, or certificate-entitled class votes separately. Tex. Bus. Orgs. Code §§ 21.457-.458.
Notice, consent, and owner liability
Every voting and nonvoting shareholder receives meeting notice at least 21 days beforehand. It states the conversion purpose and includes the plan or a summary plus the dissent notice. Tex. Bus. Orgs. Code § 21.456.
Unanimous written consent is always available. The certificate of formation may authorize a less-than-unanimous route using the votes needed at a meeting; the entity then promptly notifies record-date holders who did not sign. Electronic consent counts as signed when the statutory attribution and date information accompanies it. Tex. Bus. Orgs. Code §§ 6.201-.205.
A shareholder cannot become subject to owner liability for an LLC obligation through the conversion without that holder's consent. The continuity section separately addresses written agreement, prior liability, and liability imposed by other law for preconversion obligations. Tex. Bus. Orgs. Code §§ 10.101(f), 10.106(7).
Filing, effect, and abandonment
The corporation signs and files a certificate of conversion containing the plan or the statutory identity, plan-location, free-copy, and approval recitals. The resulting LLC's certificate of formation is filed with it. The formation certificate identifies the predecessor and its address, date, form, and jurisdiction; it omits an organizer and supplies ordinary LLC name, purpose, address, agent, and initial manager-or-member information. Tex. Bus. Orgs. Code §§ 3.005-.006, 3.010, 10.154-.155.
The conversion filing costs $300 plus the resulting entity's formation fee; the LLC fee rule uses the $300 for-profit corporation formation fee, producing a $600 statutory total. Filing is effective on acceptance unless properly delayed to a date, time, or future event within the 90-day ceiling. A future- event filing also requires the statutory event statement. Tex. Bus. Orgs. Code §§ 4.051-.055, 4.151-.154.
Before effectiveness, the plan may be abandoned under its procedure or as the governing authority decides, without another owner vote and subject to contract rights. If the certificate has already been filed, the entity files a certificate of abandonment. Tex. Bus. Orgs. Code §§ 4.057, 10.201-.203.
The entity continues without interruption in LLC form. Property remains without transfer, obligations continue, creditor and prior-owner-liability rights persist, pending proceedings need no party substitution, and ownership interests convert under the plan or dissent route. Tex. Bus. Orgs. Code § 10.106.
What trips people up
Texas uses two coordinated public filings, not one: the certificate of conversion and the resulting LLC's certificate of formation. The latter is filed with the former and is not separately filed under the ordinary formation section. Tex. Bus. Orgs. Code §§ 3.006, 10.155.
The delayed-date clock runs from signing, while a future-event statement is due no later than 90 days after filing. A future event that never occurs requires abandonment rather than silent effectiveness. Tex. Bus. Orgs. Code §§ 4.053-.057.
Common questions
Does a simple majority approve the conversion?
Not under the statutory default. Texas requires two-thirds of outstanding shares entitled to vote and the same fraction of each separately entitled class or series, subject to authorized certificate variations. Tex. Bus. Orgs. Code §§ 21.457-.458.
Can shareholders approve by written consent?
Yes. Unanimous consent is available; a less-than-unanimous route requires authorization in the certificate of formation and later notice to nonconsenting record-date holders. Tex. Bus. Orgs. Code §§ 6.201-.205.
Does statutory continuity settle contracts, licenses, or taxes?
No. The conversion continues the entity, property, obligations, creditor rights, and proceedings, but destination law still governs and filing can be conditioned on franchise-tax payment or resulting-entity liability. Those rules do not supply third-party consent, licensing, qualification, securities, or tax advice. Tex. Bus. Orgs. Code §§ 10.101(d), 10.106, 10.156.
Statutes and sources
- Tex. Bus. Orgs. Code §§ 10.101-.106 authorize the route and govern the plan, destination-law condition, owner- liability consent, effect, and continuity. Accessed September 5, 2026.
- Tex. Bus. Orgs. Code §§ 21.453, 21.456-.458 govern board action, notice, shareholder threshold, and class votes. Accessed September 5, 2026.
- Tex. Bus. Orgs. Code §§ 6.201-.205 govern unanimous and certificate-authorized nonunanimous written consent. Accessed September 5, 2026.
- Tex. Bus. Orgs. Code §§ 3.005-.006 and 3.010 govern the resulting LLC formation certificate and coordinated filing. Accessed September 5, 2026.
- Tex. Bus. Orgs. Code §§ 4.051-.057 and 4.151-.154 govern effectiveness, future events, abandonment, and fees. Accessed September 5, 2026.
- Tex. Bus. Orgs. Code §§ 10.154-.156 and 10.201-.203 govern conversion-certificate contents, filing, tax gate, and abandonment. Accessed September 5, 2026.
Source links
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