Converting an LLC to a Corporation or S Corporation in New York

If you’re planning on converting your LLC to a corporation in New York, you’ll need to form a new corporation, create a plan of merger, vote on the plan, and file a certificate of merger with the Empire State.

By , Attorney
Updated 7/31/2023

A limited liability company (LLC) is a great business structure for many businesses. But sometimes a company can benefit the most from being structured as a corporation. For example, if your business wants to attract top employees or investors, it usually helps to be a corporation where you can offer competitive stock options.

Sometimes the benefits of becoming a corporation arise after you've already organized your company as an LLC. In that case, it's not too late to build the kind of company you want. You can convert your LLC to a New York corporation. The exact requirements and procedure will depend on your situation but you can follow the general guidance in this article. (For more general information, read our overview on converting an LLC to a corporation or S corporation.)

Merging Your LLC to a Corporation in New York

In New York, unlike many other states, your only option for converting your LLC to a corporation is technically known as a "statutory merger." With a statutory merger, you'll need to file to create a new corporation before your LLC's assets and liabilities can be transferred over. (In most other states, an option exists for a so-called "statutory conversion"—which is a significantly simpler process than a statutory merger.)

What State Law Says About Mergers

New York's laws for statutory mergers cut across both the state's Limited Liability Company Law and its Business Corporation Law. More specifically, key elements of the merger procedure are laid out in the following statutory sections: N.Y. Ltd. Liab. Co. Law §§ 1001-1007 (2023) and N.Y. Bus. Corp. Law §§ 901-913 (2023).

To convert your New York LLC to a New York corporation by statutory merger, you need to:

  • create a new corporation
  • prepare an agreement of merger
  • obtain LLC member approval of an agreement of merger
  • have your new corporation's board of directors adopt a plan of a merger
  • obtain shareholder approval of the plan of merger, and
  • file a certificate of merger with the New York Department of State (DOS).

What Your LLC Operating Agreement Says About Mergers

In addition to what's required under New York law, your LLC operating agreement might have rules and procedures for the conversion process. For example, your operating agreement might require your LLC to provide additional information in its plan of merger than what New York law requires.

Your operating agreement can impose additional requirements, but it should comply with New York law. If your agreement does follow state law, you're safe to follow its merger protocols. But where your operating agreement is silent on merger procedures, New York's default rules for merging your LLC will apply.

Steps to Merge Your LLC to a New York Corporation

New York's LLC and corporation laws have specific requirements for how to merge your LLC into a corporation. Follow these steps to start operating your LLC as a corporation in New York.

1. Create a New York Corporation by Filing a Certificate of Incorporation

Creating a New York corporation is a multi-step process. However, the initial focus here is on preparing a certificate of incorporation and drafting corporate bylaws. The certificate of incorporation will be filed with the DOS. You generally will keep your corporate bylaws in-house at your business. Together, the certificate of incorporation and the bylaws will indicate that the members of your LLC will also be the shareholders of your new corporation.

The DOS—sometimes referred to as "Secretary of State"—allows you to file a certificate of incorporation on paper or online. Either way, you'll need to provide the following information:

  • the corporation's name
  • the purpose of your new corporation (which can be very general and include any lawful act or activity for a New York corporation)
  • the New York county where the corporation office will be located
  • the total number of shares of corporate stock the corporation is authorized to issue, including whether of one or more classes and the related par values (if any)
  • if there will be several classes of stock, then information about each class
  • a statement that the Secretary of State is the agent of the corporation that will accept official documents in a legal action
  • if the corporation has a registered agent, then the name and New York street address of that agent; and
  • the duration of the corporation, which might be perpetual or undetermined.

(N.Y. Bus. Corp. Law § 402 (2023).)

As of 2023, the fee for filing a certificate of incorporation in New York is $125.

2. Prepare an Agreement of Merger for Your LLC

The State of New York doesn't provide a form for an agreement of merger for merging an LLC into a corporation. Therefore, to merge your LLC, you'll need to prepare your own agreement of merger. The agreement of merger must state the terms and conditions of the conversion of LLC membership interests into either shares of stock in the new corporation or some other form of compensation for those interests. (N.Y. Ltd. Liab. Co. Law § 1002 (2023).)

If you have any questions about the specific contents of a legally acceptable agreement of merger, you should consult with a New York business lawyer.

3. LLC Members Vote on the Agreement of Merger

The members of your LLC then need to vote on the agreement of merger. More specifically, those LLC members who are entitled to vote on the agreement must vote. Check your LLC operating agreement for any rules about which members are allowed to vote on a merger.

Unless your LLC operating agreement states otherwise, approval of the agreement requires at least a majority in interest of the LLC members. A "majority in interest" means LLC members whose combined membership interests make up at least 51% of the LLC's interests. (N.Y. Ltd. Liab. Co. Law § 1002 (2023).)

4. Corporation Board of Directors Vote on a Plan of Merger

Just as your LLC prepares—and your LLC members must vote to approve—an agreement of merger, so too must your new corporation prepare—and your corporation's board of directors and shareholders approve—a plan of merger. (Unlike New York's LLC laws, which refer to an "agreement of merger," New York's corporation laws refer to a "plan of merger.")

Under New York's corporation laws, your corporation's plan of merger must at a minimum include:

  • the name of your LLC and the name of your new corporation
  • the designation and number of outstanding shares of each class and series of corporation stock, specifying classes and series that are entitled to vote
  • the terms and conditions of the proposed merger; and
  • a statement of any amendments or changes in the certificate of incorporation for your new corporation that will result from the merger, if any.

(N.Y. Bus. Corp. Law § 902 (2023).)

By default, the vote of a majority of directors present at the time of the vote, if a quorum is present, is required to adopt a plan of merger. However, you should check your corporate bylaws for any possible exceptions to the default rule. (N.Y. Bus. Corp. Law § 708(d) (2023).)

5. Corporation Shareholders Vote on a Plan of Merger

After your corporate board adopts the plan of merger, it must be submitted to the corporation shareholders for their approval. You must provide advance notice of the vote along with a copy of the plan to all shareholders, regardless of their right to vote. In most cases, a simple majority of the voting shares is required to adopt the plan of merger. However, in some cases, a two-thirds majority might be required. (N.Y. Bus. Corp. Law § 903 (2023).)

6. File a Certificate of Merger with the New York Department of State

After you've completed the preceding steps, you can file a certificate of merger with the DOS. The State of New York doesn't provide a form for the certificate of merger. Instead, you'll have to draft your own certificate. New York's LLC laws provide somewhat different guidance than its corporation laws regarding the certificate of merger. Looking at both sets of laws together, your certificate of merger must include:

  • the name and jurisdiction where your LLC and your new corporation were formed (New York)
  • the name under which your LLC was formed, if different from its current name
  • the name under which your new corporation was formed, if different from its current name
  • the date of filing your LLC's articles of organization
  • the date of filing your corporation's certificate of incorporation
  • a statement that an agreement of merger was approved by your LLC
  • a statement that a plan of merger was approved by your corporation, including how the merger was authorized by your corporation
  • the name of the corporation that'll be the surviving business entity after the merger
  • the effective date of the merger if not the date of filing the certificate of merger
  • the information required in your corporation's plan of merger
  • a statement that the Secretary of State is the agent of the corporation that will accept official documents in a legal action
  • a statement that the agreement of merger is on file at the place of business of the corporation that remains after the merger; and
  • a statement that the agreement of merger will be provided by the corporation to any person holding an interest in the LLC or corporation.

(N.Y. Ltd. Liab. Co. Law § 1003 (2023); N.Y. Bus. Corp. Law § 904 (2023).)

The certificate of merger must include a completed DOS cover sheet. As of 2023, the fee for filing a certificate of merger in New York is $60. You can find information about how to file and the filing fees on the certificate of merger section of the DOS website.

How Assets and Liabilities Are Transferred After Merger

When you merge your LLC into a corporation, generally everything associated with your LLC will transfer to the new corporation as if the merger didn't occur.

Generally speaking, the following that once existed under the LLC will now continue under the corporation:

  • all of the property belonging to the LLC
  • all debts, liabilities, and other obligations of the LLC
  • all rights of creditors regarding, and liens on, any LLC property
  • all pending legal actions or proceedings against the LLC
  • all obligations of the LLC for which an LLC member was personally liable, and
  • all obligations of the LLC itself.

(N.Y. Ltd. Liab. Co. Law § 1004 (2023); N.Y. Bus. Corp. Law § 906 (2023).)

For example, if a creditor has a claim against your LLC, that same creditor will have the same claim against your new corporation. Or, if your LLC owns a piece of land, your new corporation will now own that property.

What to Do After You File Your Conversion Paperwork

Apart from the above steps, you'll also need to take care of all the tasks normally associated with creating and maintaining a new corporation, such as:

By following these formalities, you can help ensure that your business qualifies for the advantages of corporate structure, such as limited liability and tax benefits.

With regard to the first listed item—drafting corporate bylaws—be aware that this is often a complicated process. The bylaws are an internal document that lay out, often in great detail, the rules for running your corporation. If you're unsure about what to include in your bylaws, consult with a business lawyer.

One other essential step in the merger process is to make sure that no business contracts—such as loan agreements, commercial lease agreements, and licenses and permits—will be affected by your business's entity change.

Additional Guidance About Merging Your New York LLC into a New York Corporation

Before merging your LLC into a corporation, make sure you understand the differences between the business structures and the effects of such a merger. New York doesn't allow for simple "conversions" of LLCs into corporations and the state's merger process is complicated. It's important that the process be completed correctly.

Moreover, New York has additional and distinct legal requirements for corporations that you'll need to follow. In short, if you need legal assistance with merging your LLC or complying with the New York Business Corporation Law, you should talk to a business attorney.

For a more complete discussion of the steps involved in forming a corporation, consult Incorporate Your Business: A Step-by-Step Guide to Forming a Corporation in Any State, by Anthony Mancuso (Nolo).

Get Professional Help
Talk to a Business Law attorney.
There was a problem with the submission. Please refresh the page and try again
Full Name is required
Email is required
Please enter a valid Email
Phone Number is required
Please enter a valid Phone Number
Zip Code is required
Please add a valid Zip Code
Please enter a valid Case Description
Description is required

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you