Plan of Conversion: LLC to Corporation (DE)

by Practical Law Corporate & Securities

A Standard Document that provides a form of a plan of conversion for a Delaware limited liability company (LLC) converting into a Delaware corporation through a statutory conversion. This process is governed by Section 18-216 of the Delaware Limited Liability Company Act (the Delaware Act) and Section 265 of the Delaware General Corporation Law (DGCL). This Standard Document sets out the key terms, conditions, and procedures for the entity conversion, including the automatic conversion of LLC membership interests into shares of common stock. It addresses the legal effects of the conversion, such as the continuation of the LLC's existence in corporate form and the seamless transition of all rights, properties, and liabilities to the new corporation. The plan also contains provisions for the post-conversion corporation's governance structure, including its certificate of incorporation, by-laws, and initial management. Furthermore, this Standard Document addresses the intended US federal income tax consequences of the conversion. This Standard Document includes integrated notes with important explanations and drafting and negotiating tips.