Delaware LLC to C-Corp Conversion Guide & Statutory Fee Calculator
Convert your bootstrapped LLC into a venture-scale Delaware C-Corporation seamlessly by operation of law. Calculate state filing fees, understand IRC § 351 tax non-recognition, and follow the 5-step legal execution checklist.
Statutory Delaware LLC to C-Corp Conversion Under 8 Del. C. § 265
Delaware law enables an existing domestic LLC to convert into a venture-scale C-Corporation seamlessly by operation of law. All assets, bank accounts, contracts, and IP remain intact without needing asset assignment agreements.
Statutory State Filing Fees
DE Div of CorporationsWhy Convert to Delaware C-Corp?
5-Step Statutory Conversion Action Checklist
0 of 5 statutory milestones completed
LLC Member Consent & Plan of Conversion
The LLC members must formally approve a Plan of Conversion specifying the terms of converting membership units into corporate common stock.
File Certificate of Conversion & Certificate of Incorporation
Simultaneously file the Certificate of Conversion (Form Corp-Conv) and the new Certificate of Incorporation with the Delaware Division of Corporations.
Adopt Corporate Bylaws & Appoint Officers
The initial board of directors executes organizational resolutions adopting corporate bylaws, appointing executive officers, and setting the fiscal year.
Issue Common Stock Certificates & Execute 83(b) Elections
Cancel LLC membership units and issue new C-Corp stock certificates. If founder shares are subject to vesting, file Section 83(b) elections within 30 days.
Final LLC Tax Return & IRS EIN Continuity
File a final Form 1065 partnership tax return for the LLC marked "Final Return" covering the pre-conversion tax period.
How do you convert a Delaware LLC into a C-corporation?
The LLC’s members approve the conversion as the LLC agreement requires (6 Del. C. § 18-216), and the company files a Certificate of Conversion together with a Certificate of Incorporation with the Delaware Division of Corporations (8 Del. C. § 265). The business keeps its assets, contracts, and liabilities; only its legal form changes.
After filing, the new corporation adopts bylaws, elects directors, issues stock in exchange for the former membership interests, and records the issuance in its stock ledger.
Is converting an LLC to a C-corp taxable?
Usually not. When an LLC taxed as a partnership converts to a corporation, the IRS treats it as a contribution of the LLC’s assets to the corporation in exchange for stock (Rev. Rul. 2004-59), which is tax-free under 26 U.S.C. § 351 when the owners control at least 80% of the corporation immediately afterward.
Gain can arise if the LLC’s liabilities exceed the tax basis of its assets, or if the owners receive anything other than stock. Have an accountant check the balance sheet before filing.
Why do startups convert from an LLC to a C-corp?
Most venture funds only invest in C-corporations. Pass-through income from an LLC creates tax filings, and for some fund investors unwanted tax results, while C-corp stock can qualify for the Section 1202 QSBS exclusion and supports standard stock-option plans.
Converting before a priced round also starts the QSBS holding period sooner, because it begins when the corporation issues the stock.
What happens to Delaware taxes after the conversion?
The company stops paying the flat LLC annual tax and starts paying the corporate franchise tax and $50 annual report fee, due each March 1. Choose authorized shares carefully in the new Certificate of Incorporation, since they drive the Authorized Shares Method calculation.
Most startups then file under the Assumed Par Value Capital Method, which keeps the tax at or near the $400 minimum.