Question

In which of the following cases does the conversion of an existing business to an LLC take effect?

1) when the first certificate of interest is issued
2) when the members enter into an agreement of conversion
3) when an operating agreement is finalized by members
4) when the articles of organization are filed with the secretary of state

Answer 1

The conversion of an existing business to an LLC is official when the articles of organization are filed with the secretary of state.

Step-by-step explanation:

The conversion of an existing business to a Limited Liability Company (LLC) officially takes effect when the articles of organization are filed with the secretary of state. The filing of these documents is a legal requirement for the establishment of an LLC, marking the completion of the conversion process from a sole proprietorship, partnership, or a corporation to the new LLC structure. The members may have previously agreed to convert the company to an LLC and may have drafted an operating agreement, but it is the filing with the secretary of state that is the critical step that legally establishes the LLC.