Learn important things to keep in mind when legally changing your business domicile.
Redomestication refers to when a business changes the state that’s considered its home state (also known as its “domicile state”). It’s a process that shifts a company’s charter to a different state, altering its residence.
Before I get into what’s involved with redomestication, let’s first talk about “domestication” and a business’s domicile.
Business domestication and domicile
Generally, a limited liability company or corporation’s domicile state is the state where the business was legally formed. Domestication, establishing a home state, gets completed by filing forms called Articles of Organization (LLC) or Articles of Incorporation (corporation). The domicile is usually where the principal place of business resides.
However, some entrepreneurs choose to move their company or change its home state to one other than where they have their primary business location. Why? Usually, they see benefits (such as a more business-friendly legal or tax environment) in registering in a different state. For example, Delaware has become a popular state for corporations and LLCs to file a certificate of incorporation or certificate of formation with the Delaware Division of Corporations.
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Why would a business want to redomesticate?
As a company grows and evolves, a business owner may find redomestication advantageous for several reasons:
- The target market has changed, and better opportunities exist in a different state.
- Real estate costs (renting, leasing, property taxes, etc.) have risen in the current domicile state and significantly affect profitability.
- The domicile state has imposed additional or raised business taxes and fees.
- The domicile state has implemented more regulations on the industry the business is involved in.
- Other states may have introduced tax incentives that would benefit the business.
- Redomestication will serve the business owner’s family life more effectively (such as access to better schools for their kids, closer to job opportunities for their spouse, or nearer to aging parents, etc.).
- The new state will provide access to a more extensive or more diverse workforce.
Steps to changing a company’s home state
The process of redomesticating may differ depending on the state. It’s critical to research what’s involved and helpful to enlist the expertise of an attorney and tax advisor before venturing down the path. Generally, business owners will have to follow the following steps:
- Complete (but don’t yet file) the current state’s Articles of Dissolution form.
- Apply for domestication in the new state by filing Articles of Domestication (or Articles of Continuance), providing a Certificate of Good Standing from the current home state and providing a copy of (completed but not filed) Articles of Dissolution form for the existing home state.
- After receiving approval from the new state, dissolve the business in the state where it was chartered originally.
More articles from AllBusiness.com:
7 things to keep in mind when moving your business
1. Don’t jump the gun
It can have devastating consequences if a business dissolves in its original state before the new state has officially approved its domestication filing. If the new state rejects the request, you could be left with no active, legal business entity.
2. Be aware that not all states allow redomestication
Although businesses can leave any state, not all states allow companies to redomesticate to their jurisdictions. States that don’t acknowledge redomestication typically require you to dissolve the business in your current home state and register the brand-new business entity in the new home state. As you might imagine, that process becomes more complicated (and usually more costly) than filing domestication documents.
Here is a current list of states which allow out-of-state businesses to domesticate within the state’s borders. Each state has its own rules and processes, so it’s crucial that you research any details.
- District of Columbia
- New Hampshire
- New Jersey
- South Carolina
- South Dakota
3. Understand that redomestication is different from foreign qualification
After a company completes redomestication, it ceases to exist in its original home state. It must then follow the laws, regulations, and compliance requirements of its new home state.
Don’t confuse redomestication with foreign qualification. Foreign qualification involves registering a business in another state (or states) in addition to its home state. With foreign qualification, the business retains its residence in the state where it initially domesticated.
4. Stay on top of business license and permit requirements
It’s important to research any required licenses and permits in the new home state before doing any business there. This may include sales tax registration so you can report and remit sales tax on taxable goods and services sold in the state.
Be aware that conducting business without the proper licensing can lead to hefty penalties and legal problems. Also, if you have state or local business licenses and permits in your current home state, you must cancel them and apply for the required licenses and permits in the new state and local jurisdiction.
5. Prep to report and pay payroll taxes (if applicable)
If you plan to have employees in the new home state, you must register to report and pay the state income tax (SUI) and state unemployment insurance tax (SUI). These are critical elements for managing payroll and meeting a state’s business compliance requirements.
6. You may have to find a new bank
If you are using a bank that is not nationally chartered, you may need to close your existing account and open a business account with a bank in the new domicile state.
7. Don’t keep the IRS in the dark
Let the IRS know of a change in business location. That way, the agency can update its records and have the correct address on file for your business’s EIN (Employer Identification Number) or other tax ID number (e.g., your Social Security number).
Ramifications of redomestication
As with all things related to business entity registration, redomestication will have legal and tax ramifications. It’s wise for to ask your trusted advisors (such as your attorney, accountant, and tax professional) for guidance as you consider making a move.
How to move an LLC from one state to another varies by business and by state. Before making the move, you would need to check the rules and requirements for the state where you are relocating.
Information for Moving an LLC to Another State
Two options are available for moving an LLC. The first and simplest option is to register the LLC as a foreign entity in the new state while maintaining an active registration in the old state. This option lets you continue doing business in the new state and the old state. In this dual situation, you will be responsible for maintaining permits, paying taxes, and filing reports in both states. This can be expensive.
Registering as a foreign entity is also an option if the move is temporary and you plan to move back to the original state of operation. In this situation, you can continue operating as an LLC in the old state and register in the new state as a foreign corporation. You will keep the same employee identification number, permanent business address in the old state, and bank accounts while the LLC does business in the new location.
Having an LLC formed in one state and registered to do business as a foreign LLC in one or more states is acceptable. Delaware is the most common state that corporations choose as their corporate home even if they do business exclusively in other states.
If the LLC is organized in one state and registered to do business in another state, you will be held responsible for taxes and fees incurred by the LLC in the state where it was formed. This can also be costly. For example, California charges an annual franchise fee on all LLCs in the state, even if the LLC does the bulk of its business out of state. The current minimum annual fee is $800.
With the second option, if you plan to cut ties with the old state and make a clean start in the new state, you would file articles of domestication in the new state and dissolve the LLC in the old state. Check with the new and old states for their criteria for domestication. If either of the states does not allow domestication, you will then register as either a foreign entity or as a new LLC in the new state.
In most states, out-of-state business entities are allowed to domesticate or to convert to a domestic (in-state) entity. Keep in mind that an LLC registered in one state and moving to a new state must be registered with the new state to do business there.
Registering in a New State
To register as a foreign business, you must check with the state agency that handles business filings to determine if you meet the criteria for foreign qualification. If you do, you must submit the appropriate registration application form to the state agency. In some states, you can complete and submit the form for approval from the official agency’s website. In other states, the form must be mailed in.
The form will ask for information about the original registration of your LLC. You will need to provide the:
- LLC name.
- Date of registration.
- State where the LLC was originally formed.
If necessary, you must also choose an alternate business name. This may be due to another business already registered under that name. This may also be necessary if the LLC name contains prohibited words not allowed in the new state. Then, you will complete these steps:
- Hire and maintain a registered agent in each state. This is an individual or company responsible for receiving legal paperwork on behalf of the LLC.
- Provide a certificate of good standing from the original state. The form is also known as a certificate of facts, certificate of existence, and certificate of status.
- File, mail, or submit the application and filing fee. This is usually around $100.
- A certificate of registry should be sent to you within five business days.
- Obtain any necessary licenses or permits for your LLC.
Once filed and approved, stay current with the filing and reporting requirements for your LLC in each state.
If you need help with how to move an LLC from one state to another, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies Google, Menlo Ventures, and Airbnb.
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So You Moved? Follow This Guide to Moving Your LLC to Another State
February 04, 2022 by Lisa Crocco
Entrepreneurship comes with its own set of perks — one of which is being able to manage your business wherever you choose. Perhaps you are moving to lower your cost of living, be closer to family or you simply want to explore another area of the country. Regardless of the reason, it’s important to know your options when moving an LLC to another state.
The process varies by business and by state, so you need to first establish your goals and then look into the rules for the state you are moving to. If you’re not sure where to begin with changing your LLC address, this article is meant to help you distinguish which option best fits your needs.
Consider Your Options
You have decided to move your business and are excited to embark on this next chapter — now what? Before you move, consider consulting an attorney in your new state to handle some of the logistical details and ensure the transition is both seamless and meets the new state requirements.
Essentially, you have three options to move your LLC to another location:
- Transfer an LLC from One State to Another for a Permanent Move
- Keep an Old LLC and Register in a New State for a Temporary Move
- Dissolve an Old LLC and Create a New One for a Fresh Start
Transfer an LLC from One State to Another
The process of transferring an LLC to another state is known as domestication. This may be the easiest and best way to handle an LLC move, especially if your move will be permanent. However, not all states allow it, so you will need to check if domestication is permitted in both states. Here is a list of states that allow domestication:
- District of Columbia
- New Hampshire
- New Jersey
- South Carolina
- South Dakota
You create a domesticated LLC by obtaining a certificate of good standing from the old state and filing it, along with articles of domestication, with the secretary of state or other agency in charge of business filings in your new state. You’ll then need to dissolve the LLC in the old state.
Domesticating provides several benefits including keeping the same bank accounts, tax ID number, credit rating and maintaining previous business relationships. Additionally, you’ll only be located in one state, so you won’t have to meet two states’ LLC requirements like you will need to in the second option below.
Keep an Old LLC and Register in a New State
If your move is temporary or you plan to move back to the original state of operation, consider continuing as an LLC or Corporation in the old state and registering as a foreign corporation doing business in a new state. When you move an LLC to another state, your business is considered a “foreign LLC” in that state.
This option will likely be the most expensive of the three. You will have to pay yearly fees, and you will also need a registered agent in both states to keep up with each state’s LLC filing and reporting requirements. However, if you anticipate changing states again soon, this might be your best bet. You can maintain the same employer identification number, bank accounts and permanent business address while still operating your business in a new location.
To register as a foreign business, check if you meet the criteria for foreign qualification and then submit a form to the state agency responsible for business filings.
Dissolve an Old LLC and Create a New One
If your goal is to form a new business or merge into a new corporation, you must go through the process of dissolving the old one. There are a few different ways to accomplish this: merge the two LLCs, liquidate the old LLC or have the members of the old LLC contribute their membership interests to the new LLC. Because this process is the most complicated of the three options, it’s a good idea to seek assistance from a local business attorney to make the process as painless as possible. Incfile can also ease the burden by doing the dissolution paperwork for you.
Forming a new LLC can be inconvenient because you will have to get a new tax ID number and establish new business accounts. You may also lose the benefit of good credit that your business has built over the years.
However, forming a new LLC might be your best choice if your state does not allow domestication and you do not want to contend with operating an LLC that is formed in one state and registered to do business in another.
Learn the Rules
As we previously noted, different states have different rules. When making the move to a new state, it is important to follow the guidelines for both the state you are moving out of and the state you are moving into. Find out the requirements for forming an LLC in your state. After this, you can properly assess the best option for your business, and be on your way to successfully operating your business in a new state.
Are you moving to a new state and wondering how to re-establish your business there? Wondering how to make a seamless transition for your sole proprietorship, LLC or corporation in a new location? Here’s some essential information about relocating your business.
It’s pretty straightforward to move a sole proprietorship (or partnership) to a new state. You’re required to register your new business using the “Doing Business As” (DBA) registration process in your new state at which point you’ll discontinue your old one. Depending on the location of your business, you’ll either register at your county clerk’s office or with the state government. You can read more about DBA names here.
Limited Liability Companies (LLCs)
There are a few choices to consider when you move your LLC to a new state, so it’s wise to consult an attorney for expert guidance on the particulars of your business situation. Here are your options:
- Continue your LLC in the previous state. Register as a foreign (out-of-state) LLC in your new state. This translates into more paperwork for you because you’ll need to file duplicate annual reports and it may complicate your taxes. Things get more complex if you’re reporting for a multi-member LLC.
- Dissolve your LLC in the previous state. Establish a new LLC in your new state. There aren’t any tax consequences if you take this route.
- Register a new LLC in your new state. Each member transfers membership interest. When you register a new LLC, have each member transfer his or her percent ownership from the previous LLC to the new one.
- Register a new LLC in your new state. Merge your previous LLC into your new LLC. You can continue with your existing EIN because the IRS views this as a continuation of the previous LLC. If all LLC members still have a 50-percent interest in the capital and profits of the new LLC, you won’t face any tax consequences.
Moving a corporation to a new state mirrors the process for an LLC. As always, it’s best to talk to an attorney about any tax consequences, reporting requirements and any specific requirements in your previous state about dissolving a corporation. Here’s what you can consider when relocating your corporation:
- Continue your corporation in the previous state. Register as a foreign corporation in your new state. Again, this translates into increased paperwork and the chance that you’ll incur fees in both states.
- Dissolve your corporation in the previous state. Establish a new corporation in your new state. Be aware that there may be costly tax consequences associated with this option and may have implications on employee benefits (such as retirement plans).
- Register a new corporation in your new state. Merge your previous corporation into your new one. This eliminates the need to pay fees in two states and allows for a tax-free reorganization.
After Your Move – Licenses, Permits and Taxes
Don’t forget your post-move steps for your small business, including applying for all the necessary licenses and permits (which vary by state). And keep in mind local zoning laws as they apply to your new location.
You’ll also want to be sure to take care of your tax obligations. Because you’re moving out of state, you’ll need to close out your tax year in your old state (often as simple as checking the “Final Return” box on your state return). Every business is unique, so talk to a tax expert for an understanding of your business tax responsibilities in the first year of your move. You can also deduct or capitalize the costs incurred during business relocation (including moving costs, relocation site scouting trips, travel and meeting costs). Get more guidance on small business expenses and tax deductions here.
Life comes at you fast, which means having a business attorney readily available to roll with the punches of your business needs is imperative. Whether you decide to move to another state or have been offered another reason personally or financially, there are many factors to consider before doing so. The move itself will not only require the physicality of moving all your belongings, but you own an LLC (Limited Liability Company), and figuring out how to move that will be another requirement aside from the sweating.
Moving your business is a feat in and of itself, but moving your business shouldn’t have to be. The business attorneys at Enara Law PLLC are here to provide you with all the resources and information you need so you can have a business fully operational before you even step foot into your newfound state of residence.
How To File LLC Articles Of Domestication
When filing for a “Domestication” for your LLC, it means the process of changing, ergo the companies domicile or location can be changed and, in this situation, changed to your new resident state. You can change the residence from any form but only move it to specific conditions that support domestication. Some Examples of these states include:
- District of Columbia
- New Hampshire
- New Jersey
- South Carolina
- South Dakota
Suppose you do not see your state listed above. In that case, you may need to find a new state that supports domestication, and if your new state does not support domestication and you don’t want to contend with operating an LLC that’s formed in one state and registered to do business in another, then developing a new LLC all together might be your only option. In a perfect world, you have chosen a green light state for domestication. Then you are allowed to keep the same EIN (Tax Identification Number), which further helps your business’s integrity. Since you are making a change to the business address of your LLC, this would mean filing an Amendment to your Articles of Organization. Once that has been done, having a Certificate of Good Standing is your next step. Then filing for the actual Articles of domestication comes after that. Your final step is to dissolve the previous business in your former state and submit a form of proof in your new state to solidify the successful transition of moving your business from state to state.
The more knowledge you have before you make your move, the easier the transition will be for you and your business. This will also help ensure you can work seamlessly in your new state without making crucial document mistakes. If you need assistance, Enara Law PLLC is here to help. Please give us a call at 602-687-2010. We offer a twenty-four hour seven days a week service. You can also email us directly at [email protected]
To relocate or move your business to another state, you’ll need to undergo a process called business domestication (also known as change of domicile).
What is Domestication?
Domesticating a business involves the moving of an existing business to a new state. Domestication allows the business to retain its original date of incorporation, its existing federal tax identification number, bank accounts, licenses, and lines of credit. In addition, retaining the age of the corporation may be useful when applying for new lines of credit as the business will have a provable history.
30 states (plus Washington DC) support domestication. However, exact rules can vary from state to state. For example, California allows domestication ONLY from states that also allow it. States like Arkansas or New York, that have no provisions for domestication, cannot domesticate to California. States like Arizona and South Carolina only allow corporations to domesticate. Nebraska only allows insurance companies to domesticate.
See a chart of the 31 jurisdictions that allow domestication—and the businesses permitted to domesticate there—at the bottom of this page.
Can Northwest Domesticate My Business?
Yes. We offer Wyoming LLC domestication and Wyoming corporation domestication service.
Why Wyoming? Wyoming is one of the most business-friendly states in the nation with great asset protection and low operating costs. We know the ins and outs of Wyoming domestication and are happy to answer all your questions. Click below to learn more about domesticating in the Equality State!
WYOMING LLC DOMESTICATION WYOMING CORPORATION DOMESTICATION
Basic Domestication Requirements
While exact rules vary widely state to state, there are a few general requirements that all businesses will need to meet for domestication:
- Your business needs to be eligible to form and operate under the laws of the new state.
- Members and/or Board of Directors must approve a change of domicile for the business.
- The business needs to be up-to-date on annual reports, tax payments, and other obligations, and in good standing in the original state of domicile.
- In addition to fees for dissolution, the organization must pay a domestication fee set forth by the state in which the business wishes to domesticate.
- Your business will need to appoint a registered agent in your new jurisdiction.
- You will also need to notify all important parties of a change in address and contact information, as well as settle all debts to vendors, and local departments and other authorities.
In states that do not allow for domestication, you will have to choose between qualifying your existing company as a foreign entity, or dissolving the business in the original state of registration and forming a new company in your new state.
How to Domesticate Your Company
When it comes to paperwork, domesticating your business involves the following three steps:
You can order a Certified Copy and a Certificate of Good Standing from the state agency that originally approved your business formation (typically the Secretary of State). Note that you won’t be able to receive a Certificate of Good Standing (also called a Certificate of Existence or Certificate of Status) if you’re not in good standing with the state. You can lose good standing if your business hasn’t filed its annual report on time, failed to maintain a registered agent, or is delinquent in franchise taxes and other fees. If your business is not in good standing with the state, it will need to resolve the issues, complete the necessary filing paperwork, and pay any fees (and fines).
This document can typically be found on the Secretary of State website for the state where you’re domesticating. You’ll typically need to provide general information about your business and your registered agent information for the state of domestication. You may need to include a copy of a resolution agreeing to the change of domicile. You’ll also need to pay the state’s domestication fee.
The third step includes dissolving (dissolution) the entity in the old state. Dissolution officially closes the business in your old state and typically requires Articles of Dissolution. Once you dissolve your business, you’ll also need to submit confirmation of dissolution with your new state. A word of caution though: don’t dissolve your company until your paperwork in your new domicile has been filed and approved. If you jump the gun on dissolving your business, you could be left out in the dark with no business to run.
Advantages of Domestication
While there are alternatives to domestication, oftentimes the process of domesticating a business in its new state is just plain easier and better for the business.
- Continuity: Domestication avoids disrupting business operations. A business that properly domesticates often finds it easier to continue relations with employees, investors, and vendors. There is usually no need to update or assign contracts to a new business entity.
- Finances: Business domestication can help a company avoid the need to open new bank accounts. Because really, who wants to deal with updating all of that information?
- Taxation: Your business continues to be treated the same for tax purposes. It may continue to use its employer identification number (EIN) and file federal taxes as it did before the domestication, which helps to simplify paperwork. Also, domestication may help businesses avoid a hefty tax bill by allowing the business to liquidate its assets when operations in the original state come to a close.
Domestication vs. Foreign Qualification
It’s easy to confuse domestication with foreign qualification. The state where you form your business will consider your business to be “domestic.” Every other state will view your business as “foreign.” Foreign qualification notifies a state that a foreign business is active there. In short, foreign qualification allows a business to operate in multiple states as it expands its operations, whereas domestication is really just about moving your business from one state to another state, and closing up shop in the old state.
Example: Imagine you formed an LLC in Kansas. Your LLC is “domestic” to Kansas. If you expand your business to Indiana, then your LLC would be classified as a “foreign LLC” in Indiana. You would need registered agents in both states. Your Kansas LLC would have to file and pay the fees for both the Kansas annual report and Indiana’s biennial report. And then of course, there’s potential tax liability in both states.
However, if you domesticated your LLC in Indiana, you would no longer have a domestic Kansas LLC—just a domestic Indiana LLC.
Where Can I Domesticate My Business?
The following 31 jurisdictions allow for domestication. We’re fans of domesticating in Wyoming, but no matter where you domesticate your business, you’ll need to appoint a registered agent with a physical office in the state. And we can help. We offer registered agent service in all 50 states (plus DC and Puerto Rico).
And if the state you’re eyeing doesn’t domesticate? You can hire us to register your foreign LLC or corporation.
If you have a limited liability company (LLC), you might wish to transfer your LLC to a new state because:
- You’re moving and want to take your business with you
- You’re no longer doing business in your home state
- You’re unhappy with the laws and requirements of your home state
There are several ways to handle this situation, and transferring your LLC can be complicated. This article breaks down the three ways to shift your LLC operations to another state.
Register a Foreign LLC
If you plan to do business in a new state but continue to do business in your home state, registering a foreign LLC is likely the best option for you. A foreign LLC is simply an LLC doing business in a state other than the one in which it was initially registered. For instance, if your LLC is registered in Alabama but you also do business in Georgia, you need to register as a foreign LLC in Georgia.
When you register a foreign LLC, you must comply with the laws of all states in which you register. For example, if states have different annual filing requirements and fees, you must follow all of them. This can get expensive and complicated, particularly if you are doing business in multiple states, but it is the only way for an LLC to do business in multiple states.
Here are the steps to register a foreign LLC:
- Register your LLC in your home state if you have not done so already. You can follow our step-by-step guide to forming an LLC.
- Choose a registered agent in the state where you will be doing business. Each LLC that you register needs a registered agent in that state if the state requires one. A registered agent is a person or business authorized to accept legal, tax, and financial documents on behalf of your business. You can check your state’s website to see if you are required to have a registered agent for your LLC. You may want to choose a national service so that as you expand you have the flexibility to form foreign LLCs in other states without having to locate new registered agents in each state.
- Check with the secretary of state to learn how to register your foreign LLC and see what name requirements they have. Choose a name that meets those requirements.
- Check with the secretary of state to see what they require to form your foreign LLC. You will probably need:
- LLC’s name and name you are doing business as in your home state
- State where LLC was originally registered and date of formation
- Street address of the original LLC
- Street address of the LLC in the state where you do foreign LLC registration
- Name and personal info of your registered agent
- Original LLC registration documents from your home state
- Fill out the required paperwork for that state including your Articles of Organization, an Operating Agreement if required, and any other documents required by the new state.
- Pay associated fees for the foreign LLC registration, which vary by state.
- Check the new state’s requirements for annual filings, annual meetings, and other ongoing requirements.
If you will no longer be doing business in your home state, you have other options to transfer your LLC to another state.
Dissolve the Existing LLC
If you are transferring everything to the new state and completely terminating business in your previous state of residence, it might be best to dissolve your existing LLC and form a new LLC in your new state. Processes to dissolve LLCs vary by state. If you are a single member LLC with no debts, it will be fairly simple. Either your Articles of Organization or your operating agreement should contain rules for how your LLC can be dissolved.
Generally, dissolution requires a vote of the members. If you are the only member, it’s not a problem. But with multiple members you may need the approval of all of them. Whether yours is a single-member or multi-member LLC, you’ll need to wrap up all the business of the LLC to dissolve it, which means paying off all debts and distributing all assets.
If the value of cash or securities distributed to members is greater than their original contribution, the gains will be taxable. Appreciation on real estate or personal property assets are not taxable.
Once the LLC is dissolved according to the laws of your state, you can form a new LLC in your new state.
Domestication of the LLC
Another option is to domesticate your LLC. Domestication is the process by which an LLC changes the state in which it is registered. Once domestication is complete, the laws of the original state no longer apply, and the new state laws apply instead. This provides several benefits:
- Dissolution is not necessary
- There is no interruption in business
- You can continue to use the same bank accounts
- You can continue to use the same EIN
Each state has its own domestication process, and the laws of both states must be followed. In general, domestication occurs as follows:
- Draft a plan of conversion. This should be done by the LLCs attorney, and basically outlines the steps of domestication.
- Approve the plan of conversion. Members of the LLC must approve the plan.
- Complete documents required by each state.
- File the conversion forms and pay required fees.
- Complete any documents required by the new state to fully form the new domesticated LLC.
Domestication can be complicated because the laws between states may conflict. There also may be tax considerations at the state level such as unpaid franchise taxes that become due.
Shifting Your LLC to a New State
As this article has shown, you cannot simply transfer your LLC to a new state. To move your LLC to a different state, you can either register in the new state as a foreign LLC, dissolve the LLC and form a new one or domesticate your LLC.
If you want to move your LLC to a new state because you don’t like the laws of your current state, yet you plan to continue to do business in your home state, choosing any of the options is probably not going to help you. You would still need to register as a foreign LLC in your home state, and would thus still be subject to the laws and taxes of both states.
Generally, the only reason to wholly move your LLC to a new state is if you are moving your business to the new state and abandoning ending any business dealings in your original state.
In order for your LLC to do business in a new state, you need to decide which of the available options is right for you. The methods are not always easy, so it is highly recommended that you obtain the advice of an attorney who can also help you through the process. They can help you make the right decision and stay in compliance with the laws of both states and take the work and the weight off your shoulders.
Tired of your state raising your fees, tripling what you used to pay, billing you for a business license that they said last year you did not have to pay, now billing you for two years and putting a late charge on top of it? What if you could move your company to another state?
If your company is current with the state it is in, we can re-domicile or file for a certificate of continuation (transfer) to move your company to Wyoming for, in some cases, less than what you are being charged this year for fees. And next year your Wyoming state fees, in most cases, will be $60! (You can move a company from any state or country).
Here are the details for moving your business or corporation to another state and starting a Wyoming corporation:
- You can move any type of US company. An LLC, corporation, partnership, or public company to Wyoming. This is also called a Continuance.
- Your company must be current with your state. The date for its renewal needs to be at least 2 to 4 weeks away from the time you give us the order, to transfer the corporation to Wyoming.
- We will send you an electronic document to sign giving us the right to move the company. Then we will order a Certificate of Good Standing and Certified copies of the Articles from your state. Once we have those in hand we will combine those with the paperwork for Wyoming and submit it.
- About a week after that, we will send you a new corporate kit, if ordered. It will include 20 new share certificates, a new corporate seal, and suggested meetings. We will also include the Articles of Dissolution that you must file with your current state. You may have to pay them a fee to file this.
- Once that is done you are done paying your state. Your company will show as dissolved in your state’s database. In the Wyoming database, it will show that it was a company formed in your state on such and such a date, moved to Wyoming on the date it was recorded in Wyoming.
You will gain the following benefits with a Wyoming Corporation:
- Your yearly fee to the State of Wyoming will be $60, assuming that you have no assets located inside the state.
- Your company could come under the best asset protection laws in the nation.
- You will retain the original formation date of the company.
- You will retain the same tax id number.
- You will not have to move assets to a newly formed company, risking federal taxes.
- You will get the benefit of dealing with a company that has been doing this for over 14 years.
Reasons to move out of Nevada
You now have to file a tax return with Nevada, even if you are under the gross receipts tax limit. This provides Nevada with inside information in regards to your company. When you relocate to Wyoming, this information will not be asked for.
Your minimum yearly State fee to Nevada for a corporation is at least $650. If you had a Wyoming corporation, in most cases this fee would be $60.
You may be required to list owners with Nevada. When moving to Wyoming, you are not asked for this information.
Reasons to move out of Delaware
Wyoming corporate law is clear in that Wyoming corporations may engage in stock buy-back programs without any restrictions. The restrictions that apply to the payment of corporate dividends, in Delaware, are not included in the provision of Wyoming law that specifically authorizes stock buy-backs. The legal certainty provided by Wyoming law on this point is a clear advantage over the present state of Delaware corporate and case law. Additionally, there are substantial savings on state franchise tax. We have had public companies save over $250,000 per year in-state fees, by re-domiciling to Wyoming.
The cost to re-domicile is $595 plus any fees that your current state charges for documents and filings.
If you are moving a business to another state, check with your attorney to see if your company is doing anything that would require it to be registered in the state you are moving from.
Sometimes, it becomes necessary for companies to relocate across state lines. There can be many reasons for this decision: wanting to be closer to your family, moving to a city with a lower cost of living, or a better quality of life for the employer and employees. Perhaps you want to open more horizons for your business.
Regardless of why moving a business from one state to another involves dealing with many crucial business relocation tasks. You should plan far ahead to manage the range of tasks in moving your business. Find a suitable space, apply for tax and other incentives, coordinate with your staff, send a message to your customers, obtain a business license, and, finally, the physical movement to another place. Besides these tasks, relocating the business entity requires different procedures for different businesses.
Moving a business from one state to another requires several tasks before the actual physical movement occurs. Review the logistical details of the state where you are planning to move your business. Look into taxation matters of the new state. You can hire services from an accountant or bookkeeper to do the paperwork. Look for tax incentives that may be available in the new place of business. Make a budget and pay close attention to your business’ bookkeeping.
Sole proprietorships and partnerships can easily be moved and registered in another state. A C corporation, S corporation, or Limited Liability Company (LLC) needs formal actions for the relocation process.
A sole proprietorship is easiest to move to a different state. You only need to register your new business by filing for a DBA “Doing Business As” as a new state registration process. At this point, you will discontinue your old business in the previous state. Depending on the state, your business will have to be registered at the county’s clerk office or with the government
Limited Liability Companies (LLCs)
When your company is an LLC, it is better to hire an attorney when moving your business to another state. It is better to review your choices with an expert attorney’s guidance as things can get tricky.
Continue your LLC in the previous state
You do not simply finish your LLC business entity in the old state. You will register in another state as an out-of-state LLC. You will also need to file for duplicate annual reports. This will make taxation matters complex. It will be more complex if the LLC is a multi-member organization.
Close your LLC in the former state
Closing your LLC in your previous location will be less complex when it comes to tax matters, and filing for duplicate annual reports will not be required.
Register a new LLC in another state
When you register a new LLC, each member transfers their membership interest and percent share from the former LLC to the new LLC.
Merge the LLC
You can register a new LLC in your new location by merging the former LLC into the new one. This way, you can keep your existing EIN because the IRS takes this as a continuation of the former LLC.
Moving a Corporation
- Continue Former Corporation in the old state. Register as a Foreign Corporation in another state. This will cause a lot of paperwork, and you will have to pay fees in both states. You must also pay for duplicate annual reports and franchise taxes.
- Close your corporation in the former state. Start a new corporation in another state. This may cause costly taxes, and it may have effects on employee benefits like retirement plans. It requires a filing with the old state and paying any outstanding taxes and dissolution fees.
- Register a new corporation in another state. Merge Former Corporation into your new corporation. This removes the necessity to pay fees in two states and permits for a tax-free reorganization. For a C corporation, this can be tax-free. There is no tax on the merger of the old corporation into the new corporation.
To move your business from one state to another requires several tasks before the final physical movement to another state happens. It would be best if you planned to manage the range of tasks to move your business to another state with as much ease as possible. A sole proprietorship and partnerships can be easily moved to another state. A Limited Liability Company (LLC) and a corporation need formal actions for the relocation process.
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The formal transfer of an LLC from one state to another is known as domestication. However, domestication is permitted only if both states allow for it. Domestication would be appropriate if you do no longer wish to conduct business in the original state of formation and would like to avoid dissolution and new company formation in the other jurisdiction. Many business owners choose to domesticate when they completely relocate to another state and wish to move their company with them.
How Do I Domesticate my LLC in Florida?
As mentioned above, if neither or only one of the two states permit domestication, this option is not available. Instead, you would need to form a new company with the Secretary of State or State Department in the new state and dissolve your company in the originating state. States that currently support domestication include Arizona, California, Florida, and Washington D.C., among many others. So, let’s say you move to Florida from Washington D.C., and would like to relocate your business to Florida, the process would be straightforward because both jurisdictions permit domestication. To domesticate your limited liability company in Florida, you would need to file Florida Articles of Conversion, converting your “other business entity” into a Florida limited liability company, as well as Florida Articles of Organization to fully domesticate your entity in Florida, along with any other documents or information the Florida Division of Corporations may require and all applicable filing fees. As a result, you would now own a Florida LLC and can keep your company’s existing EIN, so long as your business structure remains unchanged. Once the domestication is completed, you may effectively file to dissolve the former entity in Washington D.C.
Does New York allow Domestication?
New York, for example, does not allow for domestication, which means that even if you are relocating from a state that does, such as Florida or California, you will nonetheless be required to form a new entity with the New York State Department of State (NYSDOS). As such, the process for relocating to New York will entail forming a new company within the state. It is important to note that you should first form your new company in New York and wait until you properly file and receive the Articles of Organization (other states refer to these documents as the Certificate of Formation or the Certificate of Organization). Once the formation documents are finalized, you may then file for the Articles of Dissolution to dissolve your company in the original state. You will require a new EIN for your NY company.
Do I Need a Certificate of Good Standing to Domesticate my LLC to Florida?
It is important to note that a Certificate of Good Standing is required for all states prior to domestication. This is essentially a formal document that provides proof that your business has actually been registered with the original state, and that you have complied with all obligations required by law. If you are looking to domesticate, your first step should be to obtain a Certificate of Good Standing from the original jurisdiction.