Does Texas Allow Domestication of LLC? Your Guide to Texas Business Conversion

Disclaimer This article provides general information for educational purposes only. It is not legal advice, does not create an attorney-client relationship, and should not be relied upon as a substitute for consultation with a qualified attorney. Laws vary by state, and individualized guidance is recommended.

Moving an LLC to Texas involves more than changing its business address. It changes the state law governing the company.

Texas allows an eligible out-of-state LLC to become a Texas LLC through a process commonly called domestication. Under Texas law, however, the transaction is formally known as a statutory conversion.

Unlike dissolving the original LLC and forming a new company, a conversion generally allows the business to continue as the same legal entity. This can help preserve its formation history, contracts, assets, and existing business relationships.

Does Texas Allow LLC Domestication?

Yes. Under Texas Business Organizations Code § 10.102, an eligible foreign entity may convert into a Texas entity by adopting an approved plan of conversion.

Texas treats conversion as the continuation of the existing entity in a new jurisdiction rather than the creation of an entirely unrelated business. (⁠Texas Secretary of State)

However, the conversion must also be permitted by:

• The law of the LLC’s current state
• The LLC’s operating agreement
• The required member approval process

If the original state does not authorize an outbound conversion, the business may need to use a merger or another restructuring method instead.

Conversion vs. Merger

A direct conversion is usually the cleanest option, but it is available only when both jurisdictions permit it.

Texas Conversion Requirements

The process generally involves five steps.

1. Review the Current State’s Law

Confirm that the LLC’s existing state allows it to convert into a Texas entity. That state may also require an outbound conversion filing or other closing document.

2. Approve a Plan of Conversion

The LLC must approve the conversion under its operating agreement and current state law.

The plan generally identifies:

• The converting LLC
• The resulting Texas LLC
• The terms of the conversion
• How ownership interests will continue
• The Texas certificate of formation

Texas Form 647 allows the plan to be attached or replaced with specified alternative statements.

3. Prepare the Texas Certificate of Formation

A Texas Certificate of Formation must be submitted with Form 647.

It must state that the Texas LLC is being formed under a plan of conversion and identify the original entity, jurisdiction, entity type, formation date, and address. (⁠Texas Secretary of State)

4. File Form 647

The LLC submits the following to the Texas Secretary of State:

• Form 647, Certificate of Conversion
• Texas Certificate of Formation
• Required filing fees
• Any required tax statement or certificate

The standard fees are:

The Texas Secretary of State confirms that converting a foreign LLC into a Texas LLC generally costs $600 in total filing fees. (⁠Texas Secretary of State)

5. Complete the Origin-State Filing

The LLC must also complete any filing required by its former state. The Texas filing alone does not satisfy another state’s conversion requirements.

If the foreign LLC was already registered to conduct business in Texas, its Texas foreign registration is automatically withdrawn when the conversion becomes effective. (⁠Texas Secretary of State)

Texas Franchise Tax Requirements

A conversion filing must address any required Texas franchise taxes.

The filing may generally include either:

• The required certificate of account status from the Texas Comptroller; or
• A statement that the converted Texas LLC assumes responsibility for required franchise taxes.

This means a separate tax-clearance delay may not always be necessary. (⁠Texas Secretary of State)

For the 2026 and 2027 report years, the Texas no-tax-due threshold is $2.65 million. An entity at or below that threshold generally does not file a No Tax Due Report, but a Texas LLC must still file its annual Public Information Report when required. (⁠Texas Comptroller)

Will the LLC Keep Its EIN?

An LLC-to-LLC conversion generally aims to preserve the same legal entity, so a new EIN may not be required.

However, EIN treatment is controlled by federal tax law, not the Texas Secretary of State. The company should confirm its treatment with a qualified tax adviser or the IRS.

Form 8822-B may be used to notify the IRS of a change in:

• Business mailing address
• Business location
• Responsible party

A responsible-party change must be reported within 60 days. (⁠IRS)

Update Contracts, Banks, and Licenses

Even when the LLC legally continues, the conversion may trigger notice or consent requirements under private agreements.

Review:

• Bank accounts and credit facilities
• Commercial leases
• Customer and vendor contracts
• Insurance policies
• Professional licenses
• Permits and registrations
• Payroll and tax accounts
• Foreign registrations in other states

Contracts may contain assignment, conversion, relocation, or change-of-control provisions even where no legal transfer of assets occurs.

Update the Operating Agreement

After conversion, the operating agreement should be updated to:

• Identify Texas as the governing jurisdiction
• Reference the Texas Business Organizations Code
• Confirm the company’s name and registered office
• Preserve ownership percentages
• Update management and voting provisions
• Remove references to the former state’s law

Texas LLC Conversion Checklist

• Confirm the original state permits outbound conversion
• Review the operating agreement
• Approve a plan of conversion
• Check Texas name availability
• Appoint a Texas registered agent
• Prepare Form 647
• Prepare the Texas Certificate of Formation
• Address Texas franchise tax responsibility
• File the required documents in both states
• Update the operating agreement
• Notify the IRS, banks, insurers, and contracting parties
• Review continuing obligations in the former state

Final Takeaway

Converting an out-of-state LLC into a Texas LLC can preserve business continuity while changing the company’s legal domicile.

However, a successful conversion requires compliance with both Texas law and the law of the LLC’s current state. Businesses should also review tax obligations, contracts, licenses, banking arrangements, and internal documents before the conversion becomes effective.

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