Form 646 – Certificate of Conversion of a Texas General Partnership Converting to a Texas Filing Entity

Jurisdiction: Country: United States | Province or State: Texas

What is a Form 646 – Certificate of Conversion of a Texas General Partnership Converting to a Texas Filing Entity?

Form 646 is the official filing used with the Texas Secretary of State to convert an existing Texas general partnership into a Texas filing entity, such as a limited liability company or a corporation. The conversion allows the business to continue without interruption while changing its legal form under Texas law. Rather than dissolving the partnership and forming a new entity, the conversion preserves continuity of operations, ownership history, and contractual relationships to the extent permitted by law.

This form is commonly used when partners want to obtain limited liability protection, adopt a more formal governance structure, or position the business for growth, financing, or investment. Once the certificate is accepted for filing, the converted entity becomes the legal successor to the partnership, and the partnership ceases to exist as a separate form. The conversion is governed by the Texas Business Organizations Code, which provides the statutory framework for this process.

When Would You Use a Form 646 – Certificate of Conversion of a Texas General Partnership Converting to a Texas Filing Entity?

Form 646 is used when the partners of a Texas general partnership have decided to change the business’s legal structure while maintaining continuity of the enterprise. This often occurs when the business begins taking on greater financial or operational risk and the partners want to limit personal liability by converting to an LLC or corporation. It may also be used when outside investors, lenders, or strategic partners require the business to be a filing entity rather than a general partnership.

The form is typically filed after the partners have agreed on a plan of conversion and selected the type of filing entity they want to become. Timing often aligns with significant business events, such as entering into major contracts, expanding operations, restructuring ownership, or implementing tax planning strategies. Filing Form 646 makes the conversion legally effective under Texas law.

Legal Characteristics of the Form 646 – Certificate of Conversion of a Texas General Partnership Converting to a Texas Filing Entity

Form 646 has legal effect once it is properly completed, signed, and accepted for filing by the Texas Secretary of State. The filing serves as formal evidence that the partners approved the conversion and that the statutory requirements for conversion have been satisfied. Upon effectiveness, the converted filing entity automatically succeeds to all property, rights, liabilities, and obligations of the general partnership by operation of law.

The conversion does not constitute a dissolution of the partnership for purposes of transferring assets or liabilities, which distinguishes it from winding up and forming a new entity. However, enforceability depends on accuracy, proper authorization, and compliance with the governing partnership agreement and Texas law. Third-party agreements, permits, and licenses may still require notice or consent, even though the conversion itself is legally recognized by the state.

How to Fill Out a Form 646 – Certificate of Conversion of a Texas General Partnership Converting to a Texas Filing Entity

• Start by entering the exact legal name of the existing general partnership. This must match your records. Next, state the type and name of the Texas filing entity you are converting into. This must be a valid entity type under Texas law.
• Identify the converting partnership and the converted entity clearly. Confirm that the conversion was approved as required by the partnership agreement or, if none exists, by law. You will state that the partners approved the plan of conversion.
• Provide the effective date of the conversion. If you leave it blank, the conversion takes effect when filed. Review this choice carefully if timing matters for contracts or taxes.
• Complete any additional statements required by the form. These confirm that the conversion meets Texas legal requirements. Review for accuracy and consistency.
• Sign the form using an authorized person. This is usually a partner or an authorized manager of the converted entity. Include the signer’s name and title. Once signed, submit the form for filing and keep a copy for your records.

Legal terms you might encounter (Form 646 – Certificate of Conversion of a Texas General Partnership Converting to a Texas Filing Entity)

Several legal terms commonly appear in connection with Form 646 and the conversion process. A general partnership refers to an association of two or more persons carrying on a business for profit without filing a formation document. A filing entity is an entity that is created by filing a certificate with the Secretary of State, such as a limited liability company or corporation. A plan of conversion is the internal document approved by the partners that outlines the terms and manner of converting the partnership into the new entity.

The effective date is the date on which the conversion becomes legally operative, either upon filing or on a delayed date specified in the form. Authorized person means an individual with legal authority to sign and submit the certificate, typically a partner or an authorized representative of the converted entity. Understanding these terms helps ensure the form is completed correctly and reflects the intended legal outcome.

In addition to the core terms already described, you may encounter the concept of statutory continuation when reviewing materials related to Form 646. Statutory continuation means that the converted entity is treated as the same legal business as the prior partnership for most purposes, rather than as a newly created enterprise. This concept is important for understanding why assets do not need to be separately assigned and why many contracts remain enforceable without amendment. It also explains why the converted entity generally retains the partnership’s legal history, including claims, obligations, and compliance records.

Another term that often appears is governing authority, which refers to the individual or body with authority to manage and bind the converted filing entity after the conversion. For an LLC, this may be the members or managers, depending on the structure selected, while for a corporation, it typically refers to the board of directors and officers. Understanding who holds governing authority is critical when determining who may sign documents, open accounts, or take actions on behalf of the converted entity following the effective date.

You may also see references to ownership interests or equity interests in the context of a conversion. These terms describe how the partners’ economic and voting rights in the general partnership are translated into membership interests or shares in the converted entity. The plan of conversion usually specifies the manner of this exchange, and precision in these terms helps avoid disputes about control, profit allocations, or dilution after the conversion is complete.

In practice, you may also encounter the term certificate of formation in close connection with Form 646. While Form 646 documents the act of conversion itself, the certificate of formation establishes the converted entity as a Texas filing entity with its own governing framework. Understanding the distinction helps avoid confusion, as the conversion and formation work together to effectuate the change in legal form. The conversion explains how the old entity becomes the new one, while the certificate of formation defines how the new entity is organized and governed going forward.

Another term that can be important is filing effectiveness, which refers to the moment the Secretary of State recognizes the conversion as legally effective. This can occur upon filing or at a delayed effective date specified in the document. Filing effectiveness matters because it determines when liability protections, governance rules, and tax treatment associated with the new entity begin to apply. Businesses often coordinate this timing with internal accounting periods or closing dates to ensure consistency across legal and financial records.

You may also encounter references to the successor entity or the surviving entity in discussions of conversion. These terms emphasize that the converted filing entity succeeds to the partnership’s position rather than starting fresh. This distinction can be particularly relevant when dealing with intellectual property, litigation, or regulatory filings that span the conversion date. Using correct terminology in correspondence and records helps third parties understand that the business remains fundamentally the same enterprise under a new legal form.

Finally, the concept of notice can appear frequently even though Texas law provides for automatic transfer of rights and obligations. Notice refers to the practical step of informing third parties about the conversion, even when their consent is not legally required. Understanding this term helps set expectations internally, as partners sometimes assume that no communication is necessary once the form is filed. In reality, thoughtful notice practices can reduce confusion, preserve relationships, and prevent administrative issues after conversion.

FAQs (Form 646 – Certificate of Conversion of a Texas General Partnership Converting to a Texas Filing Entity)

Does a Texas general partnership have to dissolve or wind up before converting?

No. Texas law allows a general partnership to convert directly without dissolving. The conversion is intended as a statutory continuation, meaning the business continues as the new filing entity without interruption to its legal existence.

What happens to debts and obligations after the conversion?

The converted entity automatically assumes all debts, obligations, and liabilities of the partnership by operation of law. Partners’ personal liability may change depending on the entity type selected (for example, LLC vs. corporation), so the liability impact should be evaluated as part of entity selection.

Will partners’ personal liability change after conversion?

It can. While the converted entity takes on the partnership’s liabilities, the partners’ personal exposure may be different under the new entity form. The exact change depends on the entity type and how Texas law applies to obligations incurred before vs. after the effective date.

Do we need a new federal EIN after converting?

It depends. Whether a new EIN is required is governed by federal tax rules and can vary based on the resulting entity type and tax classification. Confirm with the IRS guidance and/or a tax advisor.

What approvals are required to authorize the conversion?

The conversion must be authorized under the partnership agreement. If there is no partnership agreement (or it doesn’t address conversion), approval is governed by the applicable provisions of the Texas Business Organizations Code.

Do we have to file additional documents besides Form 646?

Often, yes. In most cases, a certificate of formation for the new filing entity must be filed in conjunction with or as part of the conversion process so the resulting entity is properly formed and reflected in the public record.

Do contracts automatically transfer to the converted entity?

Generally, yes. Under Texas law, most partnership contracts continue by operation of law in the converted filing entity. However, some contracts include notice or consent requirements triggered by a change in legal form or liability structure. Reviewing key contracts in advance helps avoid technical defaults or strained relationships.

How does conversion affect pending lawsuits or claims involving the partnership?

Typically, it does not disrupt them. Pending claims by or against the partnership generally continue, with the converted entity stepping into the partnership’s place. Courts commonly recognize the converted entity as the successor. Still, it’s advisable to notify counsel and update captions or party names when appropriate to avoid administrative delays.

How should we coordinate timing when filing Form 646 with other documents?

Texas practice allows the certificate of conversion and the certificate of formation to be coordinated so they become effective simultaneously or in a planned sequence. This can be especially important for financing closings, regulatory approvals, or aligning with tax reporting periods.

Does conversion change ownership percentages or economic arrangements among partners?

Not automatically. The legal act of conversion itself doesn’t require changes to ownership economics, but the plan of conversion can change them. Partners often use conversion to reallocate interests, introduce vesting, or create multiple classes of ownership—especially when converting to an LLC or corporation. Any changes should be clearly documented because they can carry legal and tax consequences.

Does converting provide liability protection for past actions?

Not necessarily. While the converted entity assumes the partnership’s liabilities, partners may remain personally liable for obligations incurred before the conversion, depending on the facts and applicable law. Conversion typically helps limit exposure for future liabilities arising after the effective date, but it is not a retroactive shield.

What becomes public when we file Form 646?

Form 646 becomes part of the public record once filed, and basic information—such as entity names and effective dates—will be accessible. The internal plan of conversion is typically not filed and generally remains private.

Do we need an attorney or accountant to file Form 646?

Not legally required. Texas law doesn’t require professional assistance to file Form 646, but many partnerships use attorneys and tax advisors because the bigger issues—governance, taxes, contracts, and liability—often benefit from professional review, even if the filing itself is straightforward.

Checklist: before, during, and after the Form 646 – Certificate of Conversion of a Texas General Partnership Converting to a Texas Filing Entity

Before filing Form 646

The partners should agree on the plan of conversion, choose the type of Texas filing entity, and confirm that the conversion is permitted under their partnership agreement. It is also important to review existing contracts, leases, licenses, and financing arrangements to identify any notice or consent requirements. Accurate records and consistent legal names should be gathered in advance.

During the filing process, care should be taken to ensure that all required statements are complete, the effective date is correct, and the form is signed by an authorized person. After filing, the converted entity should update internal records, notify banks and counterparties, and make any required tax or regulatory filings. Keeping stamped copies of the filed documents is essential for future reference.

As part of the pre-filing phase, partners should also evaluate how the conversion will affect management rights and decision-making authority. Moving from a general partnership to an LLC or corporation often changes default governance rules, voting thresholds, and fiduciary obligations. Discussing these changes in advance and documenting them in the plan of conversion can reduce confusion and conflict once the new entity begins operating.

During the filing stage

Attention should be paid to consistency across all documents being submitted. Information in Form 646 should align with the certificate of formation, the plan of conversion, and any internal resolutions approving the transaction. Inconsistencies in names, dates, or descriptions of the converted entity can delay acceptance or create ambiguities that surface later during audits, financing, or disputes.

After the conversion is effective, follow-through is essential. This includes updating branding, letterhead, invoices, and websites to reflect the new entity status, as well as educating employees and key stakeholders about the change. Internal compliance calendars should be revised to account for new filing obligations, such as annual reports or franchise tax filings that apply to the converted entity but did not apply to the general partnership.

Before filing, it is also wise to consider how the conversion will be communicated internally. Employees may have questions about whether their employment status, benefits, or reporting lines will change as a result of the new entity structure. While the conversion typically does not alter employment relationships by itself, clear communication can prevent uncertainty and maintain morale. Preparing internal explanations in advance helps ensure a smooth transition on the effective date.

During the conversion process, partners should maintain organized records of approvals and communications. Written consents, meeting minutes, and signed plans of conversion create a clear paper trail demonstrating that the conversion was properly authorized. These records can become important later if the conversion is questioned by investors, lenders, or regulators. Treating the conversion with the same formality as other major transactions reinforces its legitimacy.

After the filing

Attention should also be given to operational systems. Accounting software, payroll providers, and customer management systems may all require updates to reflect the new entity name and tax classification. Failing to make these changes promptly can result in mismatched records or reporting errors. A coordinated post-conversion checklist that includes both legal and operational items can help ensure nothing is overlooked.

It is equally important to monitor deadlines that arise after conversion. The new filing entity may be subject to different reporting or tax obligations than the general partnership was, such as franchise tax filings or annual reports. Establishing responsibility for these obligations and calendaring them early reduces the risk of penalties or loss of good standing. This follow-through completes the practical side of the conversion process.

Common mistakes to avoid (Form 646 – Certificate of Conversion of a Texas General Partnership Converting to a Texas Filing Entity)

• One of the most common mistakes is entering an incorrect legal name for either the existing partnership or the converted filing entity, which can result in rejection by the Secretary of State or create discrepancies in official records. Another frequent error is proceeding with the filing before obtaining the level of partner approval required under the partnership agreement or Texas law, which can later expose the conversion to internal disputes or legal challenges.
• Filers sometimes misunderstand the legal effect of conversion and assume that liabilities disappear or contracts are renegotiated automatically, which is not the case. Failing to coordinate the conversion with tax planning can lead to unexpected tax consequences, especially when ownership interests change. It is also a mistake to overlook the need to file or properly complete the formation document for the new entity or to assume that licenses, permits, and third-party agreements require no follow-up after the conversion.
• Another mistake to avoid is assuming that conversion alone resolves issues related to partner exits or new ownership arrangements. While Form 646 changes the legal structure of the business, it does not automatically address buyouts, vesting schedules, or restrictions on transfers unless these matters are clearly addressed in the plan of conversion and governing documents. Overlooking these details can lead to disputes shortly after the conversion, when expectations about ownership diverge.
• Filers sometimes neglect to consider how the conversion affects personal guarantees or security interests granted by partners. Lenders may still rely on guarantees executed during the partnership phase, and conversion does not necessarily release partners from those obligations. Failing to clarify these issues with lenders or creditors can result in misunderstandings about ongoing liability exposure.
• It is also a mistake to underestimate the administrative impact of the conversion. Even though the law provides for continuity, many third parties operate based on their own internal policies. Banks, insurers, and government agencies may require updated documentation or resolutions before recognizing the converted entity. Delaying these updates can disrupt operations, access to funds, or regulatory compliance.
• A less obvious mistake is assuming that all partners share the same understanding of what the conversion accomplishes. Differences in expectations about control, compensation, or exit rights can surface after the filing, even if the form was completed correctly. Taking time to align expectations and document agreements before conversion helps prevent disputes that are costly and disruptive once the new entity is in place.
• Another error is failing to consider how the conversion interacts with existing dispute resolution provisions. A partnership agreement may include arbitration or venue clauses that differ from those in the new entity’s governing documents. Overlooking these inconsistencies can create uncertainty about which rules apply if a conflict arises after conversion. Harmonizing dispute resolution terms as part of the conversion planning can reduce future legal friction.
• Some filers also make the mistake of treating the conversion as a purely administrative task rather than a strategic inflection point. The choice between an LLC and a corporation, for example, carries implications for governance flexibility, taxation, and fundraising. Rushing through these decisions simply to complete Form 646 can lock the business into a structure that is misaligned with its long-term goals. Thoughtful evaluation at this stage can add significant value.
• Finally, businesses sometimes overlook record retention. Discarding or failing to organize partnership-era records after conversion can make it difficult to respond to audits, due diligence requests, or litigation. Even though the partnership no longer exists as a separate form, its records remain relevant to the converted entity’s history. Preserving these documents ensures continuity and protects institutional knowledge.

What to do after filling out the Form 646 – Certificate of Conversion of a Texas General Partnership Converting to a Texas Filing Entity

1. Once Form 646 has been accepted for filing, the business should begin operating fully under the legal framework of the new Texas filing entity. This typically involves adopting and executing governing documents such as an operating agreement or bylaws, issuing membership interests or shares to reflect ownership, and updating internal records to show the converted status. The entity’s name, structure, and authority should be updated with financial institutions, vendors, insurers, and contractual counterparties.
2. The converted entity should also address tax-related matters, including confirming federal and state tax registrations, updating payroll and employment records, and making any necessary elections. Permits, licenses, and registrations should be reviewed to determine whether amendments or notifications are required. Copies of the filed certificate of conversion and related formation documents should be retained as part of the entity’s permanent records, as future compliance and governance obligations will now be governed by the rules applicable to the new filing entity rather than those for a general partnership.
3. After the conversion, it is prudent to conduct a comprehensive compliance review to ensure the new filing entity is operating in alignment with Texas law and its own governing documents. This includes confirming that required meetings, consents, or written actions are properly documented and that authority is clearly delegated to officers or managers. Establishing good governance habits early can help prevent disputes and strengthen the entity’s credibility with investors and lenders.
4. The converted entity should also revisit its risk management strategy. Insurance policies held by the general partnership may need to be amended or replaced to reflect the new entity type and ownership structure. Coverage limits, named insureds, and policy terms should be reviewed to ensure continuity of protection and avoid gaps that could arise from the change in legal form.
5. Finally, partners should think strategically about how the conversion positions the business for the future. The flexibility of an LLC or the formal structure of a corporation can support growth, succession planning, or eventual sale of the business. Keeping thorough records of the conversion, including Form 646 and related approvals, will make future transactions smoother and provide clear evidence of the entity’s legal history when it matters most.