Every entrepreneur has probably had the importance of entity selection beat into their head. If you read this site regularly, you’ve probably seen a few articles on the topic. A quick Google search turns up more articles than one could ever read. The truth is, entity selection is important, but it doesn’t always need to be done at the very beginning. If you get it right the first time, you’ll probably save some money, but if you need to change your entity, most states allow conversions. We’ll take a quick look at Louisiana, Nevada, and Delaware.
Louisiana’s process starts with a conversion application with the Secretary of State. The Secretary of State’s website doesn’t contain any information or a form for conversion, so you should probably discuss the conversion process with an attorney. If you want to look at the laws for yourself, the conversion application is discussed in Louisiana Revised Statute 12:1601 and the following sections.
Nevada is a popular state for businesses because of favorable tax treatment. The Nevada Secretary of State website has one form for conversion, and provides different options for filing, including an option for 1 to 2 hour processing time. The form looks simple, but looks like it would require some understanding of business entities to fill out properly.
One reason Delaware is popular with businesses and startups is because of their extensive development of business law. This is exemplified by the vast array options for conversion listed by the Delaware Secretary of State. They appear to have a specific form for any conversion you might be interested in, making the process the easiest in Delaware.
If you formed your LLC or Corporation without any advice (or with bad advice) and now need to convert your entity, the process isn’t terribly complicated, and some state governments have some helpful information on their website. The most important aspect of converting your entity is understanding why you need to do so.