How to Transfer Ownership of an LLC to a Corporation

Transfer ownership of a limited liability company to corporation.

The laws in all states permit a limited liability company (LLC) to be owned by any legal entity. As a result, a LLC legally can be owned by an individual person or by a corporation. If you are involved in a LLC that currently is by a group of individuals (legally known as members), you may desire to change the ownership structure. You may desire to transfer ownership of a LLC to a corporation. There is a specific process to transfer ownership of a LLC to a corporation.

Things You'll Need

• Articles of incorporation
• Agreement transferring LLC members ownership interest to corporation

Instructions

1. Obtain articles of incorporation from the office of the secretary of state. The secretary of state maintains form articles of incorporation that you access either from the agency's Internet website, or from its office in the brick and mortar world.

2. Complete the articles of incorporation. The task of filling out articles of incorporation is not complex. You need to provide basic information like the names of the directors, the address of the business, and the number of shares of stock authorized to be issued by the company.

3. File the articles of incorporation with the secretary of state. You can file the articles of incorporation online, or at the real world office. In most cases, if you file online the fee charged by the secretary of state is less.

4. Draft an agreement transferring the LLC members ownership interest to the corporation. You may want to have an attorney draft this contract for you. The agreement needs to contain the individual names of the members (owners) of the LLC. List the percentage ownership interest of each member.

5. Include a conveyance clause in the agreement that specifically states the ownership interest of each member is transferred to the corporation.

6. Execute the ownership transfer agreement. Each member (owner) should sign the document. Notarization of the signatures is not necessary, but is acceptable if desired. The transfer of ownership is completed at this juncture.

Tips & Warnings

• Consider retaining the services of a qualified and experienced attorney to handle the transfer of ownership of a LLC to a corporation. Although the state and local bar associations cannot make specific recommendations, these organizations do maintain directories of attorneys in different practice areas. Contact information for these organizations is available though the American Bar Association.

References

• "Business Law: Text and Cases"; Kenneth W. Clarkson, Roger LeRoy Miller, Gaylord A. Jentz & Frank B. Cross; 2008
• "Business Law"; Henry R. Cheeseman; 2009
• Find Law: Business Law and Regulations

Resources

• Business.gov: Business Law
• American Bar Association: Directory of State and Local Bar Associations