Frequently Asked Questions

I already have an LLC. Do I have to dissolve it to be able to use Gust Launch?

To join Gust Launch you will need to incorporate your Delaware corporation through Launch.

Below is a general explanation of how LLCs can become C-corps.

Dissolving the LLC and incorporating in Delaware

Generally, founders who dissolve their LLC (rather than taking other paths) have LLCs with no assets or liabilities: the LLC owns no IP, has little (or no) operating history, and has not begun to conduct business. In this situation, founders can simply dissolve their LLC and reincorporate a new business in Delaware.

If this strategy is appropriate for your company, we are happy to work with you to incorporate your new company in Delaware through Gust Launch.

*There are filing fees and potential taxes associated with dissolving a business. Consult with a legal professional before considering this option.

Statutory Conversion

A statutory conversion is a legal process that allows an LLC to convert to a “foreign corporation” (in this case a Delaware Corporation) through a relatively streamlined process. This process is only available in some states. Through an administrative process, a statutory conversion causes the LLC to stop being considered an LLC and to continue on as a corporation without any additional legal process needed to effect the change in status.

Typically, the state requires the LLC to vote on the conversion, create and submit a plan of conversion with the secretary of state that follows the statutory guidelines, and file and pay a fee. Every state has slightly different requirements.

*There are filing fees and potential tax and other legal consequences associated with this transaction. Consult with a legal or tax professional before considering this process.

Statutory Mergers

Statutory mergers predate statutory conversions and are slightly more complicated transactions. With statutory mergers involving LLCs merging with a Delaware Corporation, the members of the LLC exchange their units in return for stock in the Corporation, and the LLC dissolves. This transaction requires votes from both entities to be effective rather than just the vote of the LLC members (as is the case in a statutory conversion).

Now that many states have statutory conversion statutes, it is usually more efficient for the LLC to use statutory conversion rather than statutory mergers. However, for states that have not enacted a statutory conversion process, a statutory merger may be the next best available option.

Unfortunately, we do not currently support this process.

*There are filing fees and potential tax and other legal consequences associated with this transaction. Consult with a legal or tax professional before considering this process.

Nonstatutory Conversions

Nonstatutory conversions are the most complicated process to change the entity type. In a nonstatutory conversion, all the LLC membership interests, assets, and liabilities have to be formally assigned from the LLC to the newly formed Delaware corporation by way of legal agreements. Nothing happens automatically by operation of law, unlike the previous two methods. A nonstatutory conversion is very complex and you will need the help of an attorney to make one effective.

We do not support this process. 

Last updated on July 31, 2017