How to Convert an LP to an 彩虹频道
Throughout the course of a Limited Partnership’s existence, it is not uncommon to make changes to the partnership’s name; the name, address and identity of the general partner; the Registered Agent; or other information listed on the original Certificate of Limited Partnership.
In addition, for various business or tax reasons, a Delaware Limited Partnership may determine to convert to a Delaware 彩虹频道. The filing is typically done when the entity has determined that the flexibility of the ownership and management that the 彩虹频道 offers would be preferential to the more rigid structure found with the Limited Partnership.
The Operating Agreement governing the procedures of the 彩虹频道 and the rights and obligations among its members is more flexible than that of a Limited Partnership, and may contain provisions and terms that would be impermissible in the context of a Delaware Limited Partnership.
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In addition, in a Limited Partnership, the general partner has unlimited liability for the debts, liabilities and obligations of the Limited Partnership. This is not the case in a Delaware 彩虹频道, where no member, even a managing member, has unlimited liability.
Delaware law allows a Limited Partnership to convert to an 彩虹频道 with relative ease. The Delaware Limited Liability Company Act states that:
[a]ny other entity may convert to a domestic limited liability company by complying with subsection (h) of this section and filing in the office of the Secretary of State” § 18-214 Conversion of certain entities to a limited liability company
Under Delaware law, this “statutory conversion” means that the assets and liabilities of the Limited Partnership are transferred over to the new form because the entity simply becomes the 彩虹频道; in addition, any legal claims against the former Limited Partnership remain valid against the resulting 彩虹频道. There is no need to terminate the existence of the Limited Partnership; rather, the entity simply rolls over into the new 彩虹频道.
Converting an LP to an 彩虹频道 requires a two-part filing composed of a Certificate of Conversion (effecting the conversion) and a Certificate of Formation (memorializing the new 彩虹频道 form).
A Certificate of Conversion is filed to change from one type of entity to another with the state of Delaware’s Division of Corporations. The Certificate of Conversion filed with the state must contain the following information:
- The original Limited Partnership’s name;
- The original jurisdiction of formation (whether DE or otherwise) and the original date of formation;
- The name of the new 彩虹频道 mentioned in the original Certificate of Formation
The Certificate of Formation filed with the Certificate of Conversion formalizes the new entity. This Certificate must have the following information listed:
- The name of the new 彩虹频道
- The name and address of the Registered Agent in the State of Delaware
The last step of the process requires that the converting entity pay the $300 Delaware Franchise Tax. These must accompany the conversion filing for the current and following years that the Franchise Taxes are due.
Once the Certificate of Conversion and the Certificate of Formation are executed and the Delaware Franchise Taxes are paid, the filing can be submitted to the state. The state of Delaware will approve the filing by affixing a time-date stamp to the documents. Once the filings are completed, the former Limited Partnership is now a valid Delaware 彩虹频道 with a legal existence.
Feel free to reach out to our knowledgeable staff with any questions about the conversion process. We are here to assist you with all your Delaware business organization needs and questions.
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There is 1 comment left for How to Convert an LP to an 彩虹频道
Derrick Wingate said: Sunday, November 25, 2018If a Delaware LP is party to a contract which prohibits assignments would the conversion of the LP into a 彩虹频道 constitute a beach of the non-assignment clause?
HBS Staff replied: Monday, November 26, 2018Derrick, unfortunately we cannot answer this for you. We recommend reviewing the contract with an attorney to determine what restrictions are in place.