Texas Certificate of Conversion: Plan, Filing, and Effective Date

A Texas certificate of conversion is the filing you submit to the Texas Secretary of State to change your business from one entity type to another, bring a foreign entity into Texas as a Texas entity, or move a Texas entity out of state. The filing fee is $300 for most entity types, and when the conversion produces a new Texas filing entity you also pay the formation fee for that entity (another $300 for most LLCs and corporations).¹ The process is governed by Chapter 10 of the Texas Business Organizations Code, and the details matter: a rejected filing can push back your effective date and leave your business operating under the wrong structure for weeks.

What a Conversion Is Under Texas Law

A conversion is the continuance of one type of entity as a different type. The business does not dissolve and start over. It continues as the same legal entity in a new organizational form, which is why contracts, property, and liabilities travel with it automatically.

Three categories are allowed: a Texas entity converting to a different type of Texas entity (a corporation becoming an LLC, for example), a foreign entity converting into a Texas entity, and a Texas entity converting into a foreign entity formed under another state’s laws.²

Pick the Right Form

The Secretary of State publishes a series of conversion forms numbered 631 through 644, each matched to a specific starting entity and ending entity. Form 631 covers a corporation converting to a general partnership. Form 632 covers a corporation converting to an LLC.³ Using the form that matches both ends of your conversion is the first thing to get right, because filing the wrong one is a common rejection reason.

What the Certificate Must Contain

The statutory requirements live in TBOC § 10.154. A certificate of conversion is required whenever any Texas entity that is a party to the conversion is a filing entity, or when the conversion will create a new Texas filing entity.⁴ It must be signed on behalf of the converting entity and must include two things.

First, it needs either the full plan of conversion attached or a statement certifying all of the following:

the converting entity’s name, organizational form, and jurisdiction of formation
the converted entity’s name, organizational form, and jurisdiction of formation
that the plan of conversion is on file at the converting entity’s principal place of business, with the address
that the plan will remain on file at the converted entity’s principal place of business after the conversion, with that address
that a copy of the plan will be furnished at no cost to any owner or member who requests one

Second, it must include a statement that the plan was approved as required by the laws of the converting entity’s jurisdiction and the entity’s own governing documents.⁴

The Secretary of State also recommends including the entity’s file number and date of formation. The statute does not require either, but including them helps the office match your filing to the correct entity record and processes your submission faster.³ Texas file numbers run six to ten digits depending on when the entity was formed.

The Plan of Conversion

Before you can file anything with the state, the business needs an internal document called the plan of conversion. The plan lays out the terms of the conversion, including how existing ownership interests (shares, membership units, partnership interests) will convert into interests in the new entity. Every owner should be able to read it and know exactly what they will hold afterward.

You have two options for the plan itself. You can attach the full text to the certificate of conversion, or you can include the § 10.154 certification confirming the plan is kept at the entity’s principal office and available on request.⁴ Most businesses pick the certification route to keep financial terms out of the public record.

Approval has to happen first. The plan goes through the converting entity’s internal governance process before anything gets filed. For a Texas corporation, that means the board adopts a resolution approving the plan and then submits it to the shareholders for a vote.⁵ LLCs, partnerships, and other entity types follow the approval process set out in their governing documents and the subchapter of the Business Organizations Code that applies to them.

One narrow variant worth knowing exists: a “conversion and continuance” under TBOC §§ 10.1025 and 10.109, where the original entity keeps existing alongside the newly created one. If that applies, the certificate takes the title “Certificate of Conversion and Continuance” and must say the converting entity is electing to continue its existence.⁴ For most conversions this option does not apply, and the original entity ends when the conversion takes effect.

File the Certificate of Formation at the Same Time

When the converted entity is a Texas filing entity, such as an LLC or corporation, a certificate of formation has to be filed with the certificate of conversion. Both documents go in together. It is not optional.² The certificate of formation has to meet every requirement that would apply if you were forming the new entity from scratch, because it establishes the new entity’s governing structure from day one.

How to File and What It Costs

The Secretary of State accepts conversion filings three ways:

Online through SOSDirect or SOSUpload
By mail to the Corporations Section, P.O. Box 13697, Austin, Texas 78711-3697
In person at the James Earl Rudder Office Building, 1019 Brazos, Austin, Texas 78701

If you include an extra copy of the document with your submission, the office will file-stamp the copy and return it as your proof of filing.⁶ Online filings generally process faster than mailed ones, though actual turnaround depends on current workload. Pay by credit card online, or by check or money order through the mail.

On fees: the certificate of conversion is $300 for most entity types, and the certificate of formation adds another $300 for most LLCs and corporations, bringing the typical total to $600. Professional associations and limited partnerships pay $750 on the formation side. Nonprofit corporations and cooperative associations pay reduced amounts, $50 for the conversion and $25 for the formation.¹

When the Conversion Takes Effect

A conversion is generally effective the moment the Secretary of State files it. You can delay the effective date up to 90 days from the date the certificate is signed, either by naming a specific future date or by tying it to a specified event occurring within that 90-day window. The option is built into the standard conversion forms.⁷

The event-triggered version has a trap. If you tie the effective date to a future event rather than a fixed date, you must file a statement (Form 805) within 90 days confirming the event happened. Miss that deadline and the conversion never takes effect at all.⁷ The filing itself gets accepted, the business starts acting as if the conversion is in place, and no one notices the legal gap until something goes wrong.

What Carries Over Automatically

Because a conversion is a continuance rather than a new formation, the converted entity keeps the rights, property, and obligations of the converting entity without any separate transfer. Contracts, leases, and pending lawsuits carry forward. Creditors keep their claims. You do not need to re-execute agreements or re-file liens because the business changed its entity type.

Third parties still need to be told. Notify banks, insurance carriers, licensing agencies, and important contract counterparties promptly after the conversion is effective. Review your major contracts before filing, because some include change-of-entity provisions requiring advance notice or consent.

Federal Tax Follow-Up

A state-level conversion can trigger federal tax steps that are easy to miss. The two to watch are whether you need a new Employer Identification Number and whether you need to file an entity classification election.

EIN Rules

Whether you need a new EIN depends on what the entity was and what it becomes. A corporation that converts to a partnership or sole proprietorship needs a new EIN. A partnership that incorporates needs a new EIN. An LLC that terminates and re-forms as a corporation or partnership needs a new EIN.⁸

Several common conversions do not require a new EIN. An LLC classified as a partnership that converts from a different state entity type but keeps its partnership classification keeps its EIN. A corporation that converts at the state level without changing its business structure keeps its EIN. Electing S corporation or C corporation tax treatment alone does not trigger a new EIN.⁸ Getting the EIN question wrong creates problems with payroll tax accounts and bank relationships, so confirm your situation before you file the conversion.

Entity Classification Election

If the conversion changes how the business is classified for federal tax purposes, you may need to file IRS Form 8832 to elect how the IRS treats the converted entity (corporation, partnership, or disregarded entity). The form requires an effective date. If you miss the filing window, late-election relief is available under Revenue Procedures 2009-41 and 2010-32, but you have to explain why the election was late.⁹ A tax professional can help you line up the state filing date with the federal election timing before you file either one.

Also update the IRS if your business name or address changed as part of the conversion, and notify the Texas Comptroller, since the converted entity remains subject to Texas franchise tax.

1
Office of the Texas Secretary of State. Business Filings and Trademarks Fee Schedule
2
Office of the Texas Secretary of State. Form 632 – Instruction for Certificate of Conversion of a Corporation Converting to a Limited Liability Company
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Office of the Texas Secretary of State. Form 631 – General Information, Certificate of Conversion of a Corporation Converting to a General Partnership
4
State of Texas. Texas Business Organizations Code 10.154 – Certificate of Conversion
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State of Texas. Texas Business Organizations Code 21.453 – Approval of Conversion
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Office of the Texas Secretary of State. Filing and Other General FAQs
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Office of the Texas Secretary of State. Mergers and Conversions FAQs
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Internal Revenue Service. When to Get a New EIN
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Internal Revenue Service. Form 8832 – Entity Classification Election