Can I Convert a Corporation to an LLC in Texas?

Yes, but Texas requires a two-step process: dissolve your corporation and form a new LLC. There is no direct conversion statute under Tex. Bus. Org. Code. You must obtain shareholder approval to dissolve, wind up business affairs, obtain tax clearance from the Texas Comptroller, file a Certificate of Termination (Form 651) with the Secretary of State, then file Articles of Organization for your new LLC. The entire process takes 4–8 weeks depending on tax clearance timing.

Dissolving Your Corporation

Follow these steps under Tex. Bus. Org. Code § 11.101:

Vote to dissolve — Obtain shareholder approval per your bylaws or board resolution.
Wind up affairs — Collect debts, pay obligations, and distribute remaining assets to shareholders.
Obtain tax clearance — File all delinquent franchise tax reports with the Texas Comptroller. Tax clearance is mandatory before termination and may take 1–2 weeks.
File Certificate of Termination (Form 651) — Submit to the Texas Secretary of State with a $40 filing fee.

Without tax clearance, the Secretary of State cannot process your termination. This step typically causes delays.

Forming Your New LLC

After dissolution is complete, file Articles of Organization with the Texas Secretary of State under Tex. Bus. Org. Code Ch. 3. File online at https://www.sos.state.tx.us/corp/sosda/index.shtml. Your LLC must have a registered agent with a Texas street address (not a P.O. box).

Annual Reporting Requirements

Your new LLC must file a Public Information Report (PIR) annually by May 15 with the Texas Comptroller (no filing fee). Failure to file triggers a $50 penalty plus interest and potential involuntary termination.

Critical Considerations

Tax clearance is the bottleneck — Delays here delay your entire timeline.
New legal entity — Your LLC is separate from your corporation. You need a new EIN, business licenses, and updated contracts.
No direct conversion — Texas provides no single-filing conversion statute.

Contact Information

Texas Secretary of State: (512) 463-5555 or https://www.sos.texas.gov

Texas Comptroller: (512) 463-4600 or https://comptroller.texas.gov

For specific guidance, consult a Texas business attorney.

This is general information, not legal advice.