Businesses are always seeking new ways to make money and increase operating capital. Public corporations do this by acquiring investors. LLCs operating for profit are generally limited to making money through profits made from the products and services they offer to the public. As a LLC evolves, members may desire to take the LLC in a new direction by going public and attracting investors in the same manner as a corporation. In California, an LLC is permitted to convert to a corporation. The process is simply a matter of submitting the correct documentation and paying the appropriate fees.
File articles of incorporation containing a statement of conversion. The articles of incorporation must meet the minimum requirements under the California Corporations Code. This applies to domestic and foreign LLCs. The California Secretary of State provides a sample form that may be used as guidance when drafting the articles of incorporation. Download the pre-printed form from the secretary of state’s website home page. Alternatively, read the code to determine what information is mandatory. The document must be signed by all of the members of the LLC or less if a different number is stated in the original articles of organization or operating agreement.
Read More: What Are Articles of Incorporation?
File the articles of incorporation with the statement of conversion in the Secretary of State office in person at Business Entities Section, 1500 11th St, 3rd Floor, Sacramento, CA 95814. You can also mail your paperwork to Document Filing Support Unit, PO Box 944260, Sacramento, CA 94244-2600.
Pay the required fee of $150.00 to the secretary of state. There’s an additional fee of $15.00 if you're submitting your paperwork in person to the Sacramento office.
Change the entity classification of your business with the Internal Revenue Service to a corporation. Fill out IRS Form 8832, Entity Classification Election, available through the IRS, and make the appropriate selection on the form, then submit it to the IRS.