In the state of Washington, converting an entity from one type of entity to another is a relatively new concept. At one time, to change an entity into another form of entity required the formation of a second entity (the entity intended to be the final, resulting entity), then merging the existing entity into the newly formed entity. It was possible to merge a Washington entity with an entity formed in another state, with the Washington entity either being the surviving entity in the merger or being the disappearing entity in the merger.
The state of Washington has permitted the conversion of partnerships since 1998. The partnership statute permits a Washington partnership to convert to a limited partnership or a limited partnership to convert to a partnership (previously referred to as a general partnership to distinguish it from a limited partnership). However, the partnership statute does not currently permit a Washington partnership to convert into any other form of entity than a limited partnership or for another form of entity to convert into a partnership. Interestingly, Washington law permits other forms of entities, such as corporations and limited liability companies, to convert to a variety of other forms of entity, including partnerships, provided that the statutes governing the internal affairs of the entity to which the entity is to be converted permit such a conversion. In the case of Washington partnerships, the partnership statute does not permit the conversion. However, it does permit mergers involving partnerships. As a result, for a conversion involving a Washington partnership and any form of entity other than a limited partnership, the acceptable method appears to be merger of the two entities.
For any questions regarding business, mergers and acquisitions, please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-4100.