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I'm running my business as an llc registered in California.

I'm running my business...

I'm running my business as an llc registered in California. Looking to become incorporated in Delaware and dont want to change business names. I also want to have a fresh start on my accounting. Is this possible?

Lawyer's Assistant: Can you tell me what state the LLC is registered in?

California

Lawyer's Assistant: Has anything been officially filed? If so, what?

My company is officially filed and registered as an llc for the passed 6 years

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

Just starting to research incorporating in delaware

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Answered in 21 minutes by:
7/29/2017
Roy Hadavi
Category: Business Law
Satisfied Customers: 1,280
Experience: Attorney at Law Offices of Rosenstein & Associates
Verified

Hi. My name is ***** ***** I am licensed California attorney. I would be happy to provide assistance.

Before I answer your question, what is the reason that you wish to convert your LLC to a corporation registered in Delaware?

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Customer reply replied 9 months ago
I want to issue shares and an inc is more attractive for future

Converting from an LLC to a corporation is very simple. Here are the steps:

  1. Members and Managers (if applicable) sign minutes approving the conversion.
  2. Members and Managers (if applicable) sign a plan of conversion.
  3. File articles of conversion (click here for the forms) with the California Secretary of State.

As long as there is no corporation using the name that you want to use you can simply change the name from NAME, LLC to NAME, Inc.

Transferring to Delaware is also simple. Here are the steps:

  1. Form a Delaware corporation (as long as the name is ***** ***** Delaware you may use it).
  2. Have the Delaware corporation purchase all of the membership interest in the California LLC.
    1. The Delaware shareholders and officers will have to sign minutes approving the merger.
    2. The California members and managers (if applicable) will have to sign minutes approving the merger.
  3. The Delaware shareholders and officers, then vote to close the California LLC.
    1. You file dissolution papers with the California Secretary of State. Click here and see number 7.
  4. Register as a foreign corporation in California (if you have offices and operate in California).

I am sure you have done research regarding transferring to Delaware. I also know that there is a lot of information on the internet on how attractive it is to incorporate in Delaware. However, here is the truth. If you do business in California (if you are a big company or a small company) investors and vendors will find it suspicious that you are not incorporated in California. As a licensed California attorney, my first instinct whenever I see a California company not incorporated in California is that the company is trying to do something less than honest. There truly are no real advantages to being incorporated in another state, than the one you are operating in.

Regarding the accounting - the only way to have a fresh start is to skip the above steps, close down the current LLC and open up a new corporation. Otherwise, the LLC's financials follow.

Thank you so much for allowing me to help you with your question. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! There is no additional fee. If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as Good or Excellent (i.e., 4 or 5 stars)(hopefully Excellent/5 stars!). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

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Hi. Did you have any follow-up questions or need me to clarify anything? If not, I would appreciate you rating my service as Good or Excellent (i.e., 4 or 5 stars)(hopefully Excellent/5 stars!). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

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Customer reply replied 9 months ago
I do business in several states. I currently am doing business in California, Texas, and PA.
The ultimate goals are:
1. Purchase another company. This company is based in Hong Kong, however, operates in Hong Kong, London, and ShenZhen, China.
2. Purchase this company when Expert Xpress, LLC becomes and INC
3. Issue Shares of Expert Xpress, INC to previous owners of the Hong Kong company also to couple of my employees here in the USA
4. Lump everything together as Expert Xpress, INC then present to prospective investors and raise 5 million dollars to expand into 2 locations in Canada, Australia, and to pay off the Hong Kong company.
5. Once structure is complete, open for IPO or Selling the entire company all together to buyers
6. to have new books and not carry over LLC to INC.

Okay. What is your question?

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Customer reply replied 9 months ago
would Incorporating in Delaware or California allow me to reach my goals? Is there a difference?

In the modern era the advantages of a Delaware corporation have been significantly reduced to the point where it truly does not provide any real advantage.

Since your company is located in California it will be much more appealing for investors and vendors alike to see that you are incorporated in the state that you are primarily conducting business in.

However, either option would allow you to reach your goals.

Roy Hadavi
Category: Business Law
Satisfied Customers: 1,280
Experience: Attorney at Law Offices of Rosenstein & Associates
Verified
Roy Hadavi and 87 other Business Law Specialists are ready to help you
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Customer reply replied 9 months ago
thank you

You're very welcome.
Thank you so much for the 5-star rating! I know rating takes an additional step and I truly appreciate you taking the extra time! It's been my honor and privilege to help you with this. If I can help you in any way in the future, I'll be happy to help. For easy access, my bookmark is: https://www.justanswer.com/law/expert-royhadavi/ Or, simply request “Roy only” in the first line of your question.

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