Entity Conversion Attorney in Florida

The most common entity conversion we handle. An LLC formed for simplicity now needs a corporate structure to raise capital. Institutional investors - venture capital firms, angel networks, and equity crowdfunding platforms - almost universally require a C-Corporation. LLCs cannot issue preferred stock, which is the preferred equity instrument in most venture rounds, and the pass-through tax structure of an LLC creates complications for tax-exempt investors.

Under a statutory conversion, the LLC members receive shares in the new corporation proportional to their membership interests. The entity keeps its EIN, all existing contracts, and bank accounts. No assets are transferred - the entity itself continues as a new type.

Tax treatment: this conversion is generally structured to be tax-free under IRC Section 721 or the check-the-box rules if handled correctly. Coordinate with your CPA. FL Patel Law's startup legal services closely complement this conversion - see our startup lawyer page for post-conversion equity structuring.

Converting an LLC to a corporation in Florida is governed by Florida Revised LLC Act Section 605.1045 and Florida Business Corporation Act Section 607.1115. The process requires a Plan of Conversion approved by the LLC members, a Certificate of Conversion filed with the Florida Division of Corporations, and new Articles of Incorporation for the resulting corporation. State filing fees include $70 for the Articles of Incorporation plus a $25 registered agent designation. The entity keeps its same EIN, and all existing contracts and bank accounts remain valid throughout the conversion.

Entity conversions can trigger taxable events depending on the entity types involved and the direction of the conversion. Converting an LLC to a C-Corporation is generally treated as a tax-free transaction under the check-the-box rules if structured correctly. Converting from a C-Corporation to an LLC, however, can trigger recognition of built-in gains - this is one of the more tax-sensitive conversions. Converting from an S-Corp to a C-Corp by revoking the S-election does not itself trigger a tax event, but terminates pass-through treatment going forward. FL Patel Law coordinates closely with your CPA or tax advisor on conversion transactions to ensure the tax treatment is analyzed before documents are filed.

A statutory conversion (under Florida Sections 605.1045 or 607.1115) treats the transaction as a single continuous legal event. The entity keeps its EIN, all contracts remain in effect without reassignment, bank accounts stay open, and the formation date is preserved. Dissolution and reformation, by contrast, involves winding down the first entity and forming an entirely new one. This requires a new EIN, reassignment of all contracts, transfer of assets, and may trigger tax consequences. Statutory conversion is almost always the cleaner and more cost-effective path when it is available.

Filing processing at the Florida Division of Corporations (Sunbiz.org) typically takes 3 to 5 business days for standard processing. The full conversion process - including reviewing the current entity structure, drafting the Plan of Conversion, obtaining member or shareholder approval, preparing and filing all required documents, and drafting new governing documents - generally takes 2 to 4 weeks depending on the complexity of the entity and whether any IRS elections (such as Form 2553 for S-Corp tax treatment) are required after the state conversion is complete.

Yes, Florida permits the conversion of a corporation (including an S-Corporation) to an LLC under the Florida Business Corporation Act. The resulting LLC will no longer have S-Corporation status, since S-Corp is an IRS tax election that applies only to corporations. If you want the resulting LLC to be taxed as an S-Corp, the LLC can make its own S-Corp tax election (Form 2553) after the conversion is complete, subject to the eligibility requirements. This transaction is more tax-sensitive than an LLC-to-corporation conversion, and FL Patel Law works with your CPA to analyze the tax consequences before any filings are made.