How to Convert Your Fashion LLC to C-Corp in Arizona (2026)

As your Arizona fashion LLC grows, converting to a C-Corp might become necessary to attract investors, offer stock options, or optimize for specific tax advantages. This guide outlines the process, tax implications, and crucial considerations for fashion businesses making the switch in 2026. Lovie can automate this complex conversion, ensuring compliance and accuracy.

When to Convert

Conversion Steps

  1. Assess Your Current Structure and Needs: Evaluate your fashion LLC's current financial standing, future growth plans, and capital requirements to determine if a C-Corp conversion aligns with your long-term goals. Consider consulting with a financial advisor experienced in the fashion industry.
  2. Draft a Plan of Conversion: Create a formal plan outlining the conversion process, including the transfer of assets, liabilities, and equity from the LLC to the C-Corp. This plan must comply with Arizona Revised Statutes Title 29 (Partnership) and Title 10 (Corporations and Associations).
  3. Obtain LLC Member Approval: Secure unanimous consent from all LLC members to approve the conversion plan. Document this approval in the LLC's operating agreement or through a formal resolution.
  4. File Articles of Incorporation with the Arizona Corporation Commission: Prepare and file Articles of Incorporation for the new C-Corp with the Arizona Corporation Commission. The filing fee is approximately $60 as of 2024, but confirm the current fee schedule on the ACC website for 2026. Include the required information as per ARS 10-302.
  5. Obtain a New EIN from the IRS: Apply for a new Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for the newly formed C-Corp. This is a free process and can be done online through the IRS website.
  6. Transfer Assets and Liabilities: Transfer all assets and liabilities from the LLC to the C-Corp, including bank accounts, inventory, contracts, and intellectual property (e.g., trademarks for your clothing line). Ensure proper documentation for all transfers.
  7. Update Licenses and Permits: Update all relevant licenses and permits, such as business licenses, sales tax permits, and any industry-specific licenses (e.g., for textile manufacturing or importing), to reflect the new C-Corp entity name and EIN. Check with the Arizona Department of Revenue for specific requirements.

Start your formation with Lovie — $20/month, everything included.