Transfering the Visa from L1B to H1B

I am on L1B Visa for XYZ company in USA and my L1B Visa and I-94 will be expiring on Jan 2016. I would like to apply for H1B visa through ABC consultancy. Let’s assume my H1B visa got approved on July 2014 and I have resigned on August 1st 2014 from exting company on L1-B visa…Is that safe and legal to stay in USA till October 2014 (about 2 month)without having valid visa status (as H1B is valid from Oct 1st 2014 onwards). Will this not affect future visa extentions to me and my family. Kindly advice.

you should run payroll …and be employed…so its illegal

U must be working. Else there will be problems when extensions or when u apply for GC…

Other way is to travel to ur home country after H1b Approval and then resign… and come back US stamped