Raising a priced seed round? Most VCs insist on a Delaware C Corporation—not an LLC. Converting your existing Delaware LLC the wrong way can trigger taxable gain, kill 83(b) timing, or delay closing. Below is a 2025-ready roadmap to move from LLC to C-Corp via Delaware’s statutory conversion procedure—clean, fast, and tax-efficient.
Relevant IRC Codes & Definitions
| Code / Regulation | Why It Matters in an LLC ➜ C-Corp Conversion |
|---|---|
| IRC §351 | Permits tax-free transfer of property to a corporation for stock if owners control ≥ 80 %. |
| IRC §721 | Similar non-recognition rule for partnership contributions (multi-member LLCs). |
| Treas. Reg. §301.7701-3(g)(1)(i) | “Check-the-box” regs—LLC ➜ corporation election treated as asset transfer under §351. |
| IRC §708 | Terminates the partnership when assets roll into the new corporation. |
| Delaware 8 Del. C. §265 | Authorizes statutory conversion of an LLC into a corporation without dissolving or re-filing. |
IRS & State Form References
- Delaware Certificate of Conversion (LLC ➜ Corp)
- Delaware Certificate of Incorporation (filed simultaneously)
- Form 8832 or narrative statement to IRS re classification change (if treated as election)
- New Stock Ledger & 83(b) Elections—issue founder/common shares on conversion date
- Form 1120—first corporate return (mark “Initial return”)
- BOI Update—file amended FinCEN report within 30 days of conversion
Real-World Example
Case Study: APIOrbit LLC
- Two founders, 4 % angel SAFE, aiming for a $3 M seed.
- Converted via §265 statutory conversion in April 2025.
- Adopted 10 M authorized shares; issued 6 M common to founders.
- Filed 83(b) within 30 days; no taxable gain under §351.
- Closed seed 45 days later—investors satisfied with new C-Corp charter.
Step-by-Step Conversion Checklist
- Board / Member Resolution approving conversion terms.
- Draft Delaware Certificate of Conversion + Certificate of Incorporation (include VC-friendly share structure).
- File with Delaware Secretary of State—24-hour turnaround if expedited.
- Issue New Stock Certificates; cancel LLC units.
- File 83(b) Elections for any vesting stock within 30 days.
- Notify IRS:
- SMLLC ➜ file Form 8832 (within 75 days).
- Multi-member LLC ➜ file final Form 1065 (check “final”) and begin Form 1120 reporting.
- Update BOI Report with FinCEN (conversion = new company type).
- Re-paper SAFEs / Convertible Notes to reference the corporation.
- Update Bank & Payroll Accounts to reflect new corporate EIN if obtained.
- Calendar Delaware Franchise Tax—corporation now owes share-based tax + Annual Report (due 1 Jun 2026).
Conclusion
A statutory conversion keeps your EIN, contracts, and IP intact while delivering the C-Corp structure investors expect. Handle the paperwork now—before term-sheet week—and you’ll avoid taxable surprises, SEC delays, and cap-table headaches.
Call to Action
Need a turnkey LLC-to-C-Corp conversion—documents, 83(b), BOI, and IRS elections included?
👉 Book a conversion consult with Anshul Goyal, CPA, and get seed-ready in one week.
Disclaimer
This guide is for informational purposes only and does not constitute legal, tax, or financial advice. Tax consequences vary when LLCs hold appreciated assets, foreign members, or outstanding debt. Delaware fees, IRS regulations, and BOI rules may change. Engage a qualified CPA and attorney before executing a conversion.
Anshul Goyal, CPA EA FCA is licensed in the United States, admitted before the IRS, and a Chartered Accountant in India. He advises SaaS founders on Delaware formations, conversions, VC due-diligence prep, and cross-border tax strategy.
FAQs (Top 5 High-Searched)
1. Is the conversion taxable?
Usually no, if §351 control test is met and no cash boot is taken.
2. Do I need a new EIN?
Generally no; an EIN continues if entity retains same state and owners.
3. How long does Delaware take?
24 hours with expedited fee; 3–5 days standard.
4. Will my SAFEs auto-convert?
Review each SAFE—most reference next equity round, not conversion; amendments may be required.
5. Do I still pay the $300 LLC tax?
Not after conversion; the corp owes share-based Franchise Tax next year.
About Our CPA
Anshul Goyal, CPA EA FCA has guided 2,000+ founders through Delaware entity structuring, saving over $200 million in taxes and closing $1 billion+ in venture deals with audit-proof compliance.