Maryland Articles of Conversion Form: SDAT Filing and Approval

Maryland articles of conversion are the document a business files with the State Department of Assessments and Taxation (SDAT) to change from one entity type to another—say, an LLC becoming a corporation, or a limited partnership becoming an LLC—without dissolving and starting over. The filing fee is $100, the owners must approve the conversion before you file, and the articles themselves must identify both the old and new entity, confirm that approval, and explain how existing ownership interests will convert into interests in the new entity.¹

A Maryland corporation can convert into any “other entity” recognized under state law, including a domestic or foreign LLC, a partnership, a limited partnership, a business trust, or another unincorporated business form. Those entity types can also convert into a Maryland corporation, and the LLC Act provides a parallel path for LLCs converting to or from other entity types.²³

What the Articles Must Contain

The required content depends on which direction the conversion runs. Missing pieces are the most common reason SDAT rejects a filing, and the ownership-conversion section is where drafters usually cut too much detail.

A Maryland Corporation Converting Out

When a Maryland corporation converts into a different entity type, the articles must include:

The corporation’s name and the date its original articles of incorporation were filed with SDAT.
The name and place of organization of the entity the corporation is becoming.
A statement that the conversion was approved as required by statute.
How outstanding shares of stock will be converted or exchanged into membership interests, partnership interests, or other ownership interests in the new entity.
If the new entity is not organized under Maryland law, its principal office location and the name and address of a Maryland resident agent.

The articles may also include any other provision needed to carry out the conversion, and they can specify a future effective date up to 30 days after SDAT accepts the filing.⁴

Another Entity Converting Into a Maryland Corporation

When an LLC, partnership, or other entity converts into a Maryland corporation, the articles must state the converting entity’s name, formation date, and place of organization, and must describe how existing ownership interests will convert into shares of stock. The converting entity also has to file articles of incorporation that comply with the Maryland General Corporation Law alongside the articles of conversion.²

A Maryland LLC Converting Out

An LLC’s articles of conversion follow the same pattern: the LLC’s name and original filing date, the new entity’s name and place of organization, an approval statement, a description of how membership interests will be exchanged, and any additional provisions needed. Like the corporate version, the LLC articles are filed with SDAT.³

Getting Owner Approval Before You File

You cannot file articles of conversion until the entity’s owners have approved the transaction under the rules that govern their entity.

For a Maryland corporation, the board of directors must first adopt a resolution declaring the conversion advisable, then submit it to the stockholders. Every stockholder entitled to vote must receive notice of the meeting, and the conversion needs an affirmative vote of two-thirds of all votes entitled to be cast. If no stock is outstanding or subscribed for, a majority of the board can approve it alone. The charter can raise the bar higher than the statutory baseline.⁵

A Maryland LLC approves the conversion by whatever vote its operating agreement requires. If the operating agreement is silent, the default rule for major decisions under Section 4A-403(d)(1) governs.⁶

When a non-Maryland entity or a different entity type is converting into a Maryland corporation, approval follows that entity’s own governing documents and the laws of its home jurisdiction.⁵

Filing With SDAT

The completed articles go to the Maryland State Department of Assessments and Taxation. The standard filing fee is $100, and expedited service is available for an additional $50.¹ If SDAT rejects the filing, you have 60 days from the rejection date to correct and resubmit without paying a second filing fee. After that window closes, you owe the full fee again.

The articles can name a future effective date, but no more than 30 days after SDAT accepts them for record.⁴ That flexibility helps businesses line up the legal effective date with a tax year change, a contract deadline, or an internal transition plan.

What Carries Over Automatically

Maryland law treats the converted entity as the same entity that existed before. The old form ceases and the new form continues, but there is no legal gap. Several consequences follow from that continuity.

All assets vest in the new entity automatically. No separate deed, transfer document, or conveyance is required, and real property titles are not impaired.⁷ The new entity assumes all debts and obligations of the old one, creditor rights and liens are preserved, and any pending lawsuit continues without interruption. A judgment against the old entity becomes a lien on the new entity’s property. Unless the articles say otherwise, the converting entity does not have to wind up affairs, pay off liabilities, or distribute assets before the conversion takes effect. The conversion is not a dissolution and not a transfer of assets.⁸

For LLCs, the statute goes one step further and states explicitly that the conversion does not invalidate, terminate, or suspend any licenses, permits, or registrations the LLC held beforehand.⁸

Dissenting Owners and Appraisal Rights

Maryland gives stockholders who object to a conversion the right to demand the fair value of their shares in cash. Section 3-202 of the Maryland General Corporation Law specifically lists a Section 3-901 conversion as a triggering event. A dissenting stockholder who follows the statutory procedure can force the successor entity to buy their shares rather than accept whatever the conversion offers.⁹

Appraisal rights do not reach every situation. Stockholders whose shares are listed on a national securities exchange on the record date for the vote cannot exercise them, and a corporation’s charter can eliminate them entirely.⁹ For closely held corporations without a public market to set a price, the appraisal remedy matters most to minority owners and should be understood before the vote.

The LLC statute recognizes an “objecting member” and requires that the articles of conversion address the treatment of their interests.¹⁰ The operating agreement may add its own protections or procedures for members who dissent.

Tax Accounts and Your EIN

A conversion changes how the business is taxed. Turning a partnership-taxed LLC into a corporation moves the business from pass-through taxation to the corporate income tax structure; converting the other way reverses it. Either direction requires coordination with the Maryland Comptroller’s Office to update state tax accounts, and late compliance can trigger penalties of up to 25 percent of the tax owed.¹¹

Whether you keep your federal Employer Identification Number depends on the structure of the conversion. The IRS says an LLC that only changes its tax election to be treated as a corporation or S corporation does not need a new EIN, but a partnership that incorporates does, and so does a sole proprietor who incorporates or forms a partnership.¹² Handling this wrong can create trouble with lenders, vendors, and agencies that identify your business by its EIN.

Contracts, Licenses, and Intellectual Property

Because the entity continues, existing contracts generally stay in force without renegotiation. Generally does the heavy lifting there. Many commercial contracts include anti-assignment or change-of-control clauses that treat a conversion, merger, or reorganization as a triggering event, and a clause prohibiting assignment “by operation of law” can technically be breached by a conversion even though the entity continues. Review significant contracts before you file.

The LLC statute preserves licenses, permits, and registrations across the conversion.⁸ Federal registrations run on their own rules. Trademark owners should record the change with the United States Patent and Trademark Office, and a name change should be reflected in the registration.¹³ International trademark registrations go through the World Intellectual Property Organization rather than the USPTO. Neglecting these updates can weaken enforcement rights later.

Where Conversion Filings Go Wrong

The two-thirds stockholder vote is where most corporate conversions stall. A block of minority stockholders holding more than one-third of the votes can defeat the conversion outright, and even short of that, the threat of appraisal proceedings adds cost and delay. In closely held corporations the dynamic gets personal quickly. Detailed financial projections and a clear explanation of the ownership exchange, delivered before the vote, tend to prevent a fight.

SDAT rejections often come from incomplete articles. You get 60 days to fix and resubmit without a second fee, but the clock is real.¹ The section that describes how shares or membership interests will be exchanged for interests in the new entity is the one most likely to fall short on detail.

The last common failure is post-filing follow-through. Bank accounts, tax registrations, EIN records, insurance policies, contracts with assignment clauses, IP registrations, and professional licenses all need attention after the state records the conversion. None of that happens automatically.

1
Maryland State Department of Assessments and Taxation. SDAT Corporate Charter Fee Schedule
2
Maryland General Assembly. Maryland Code Corporations and Associations 3-901
3
New York Codes, Rules and Regulations. Maryland Code Corporations and Associations 4A-1103 – Articles of Conversion
4
Maryland General Assembly. Maryland Code Corporations and Associations 3-903
5
Maryland General Assembly. Maryland Code Corporations and Associations 3-902 – Approval of Conversion
6
New York Codes, Rules and Regulations. Maryland Code Corporations and Associations 4A-1102 – Conversion Approval Required
7
Maryland General Assembly. Maryland Code Corporations and Associations 3-904
8
New York Codes, Rules and Regulations. Maryland Code Corporations and Associations 4A-1104 – Effects of Conversion
9
Maryland General Assembly. Maryland Code Corporations and Associations 3-202
10
Justia. Maryland Code Corporations and Associations 4A-1104 – Effects of Conversion
11
Maryland Comptroller. Tax Guidance – Penalty and Interest Charges
12
Internal Revenue Service. When to Get a New EIN
13
United States Patent and Trademark Office. Trademark Assignments: Transferring Ownership or Changing Your Name