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1. Check the governing statutes to make sure they authorize conversions. Statutory conversions are a fairly recent innovation and not every business entity statute authorizes them.
2. Draft a plan of conversion containing the terms and conditions of the transaction.
3. Have the owners approve the plan.
CT Tip: Consult the governing state statute and the governing documents (such a corporation’s articles of incorporation and bylaws or an LLC’s operating agreement) to determine the approval procedure.
4. Draft a formation document for the post-conversion entity type. (Such as articles of incorporation or an LLC certificate of organization.)
5. Obtain and complete the appropriate certificate of conversion. (Depending on the state, the certificate of conversion may called a different name. For example, it could be called articles of conversion or statement of conversion.)
6. Deliver the certificate of conversion, along with the formation document and proper fee to the state filing office.
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