Key Takeaways:

  • Florida allows LLC domestication, also known as conversion, enabling businesses to relocate their LLCs without dissolving and re-registering.
  • Domestication offers multiple advantages, including retaining business continuity, maintaining contracts, and preserving credit history.
  • The domestication process involves filing Articles of Domestication with the Florida Division of Corporations and meeting state-specific requirements.
  • Not all states allow domestication, and in such cases, businesses may need to dissolve the LLC and form a new one.
  • Additional post-domestication steps include updating legal documents, informing stakeholders, and complying with tax obligations in Florida.
  • Key legal considerations involve ensuring compliance with Florida statutes, potential tax implications, and required business licenses.
  • LLC owners should evaluate cost factors, such as state filing fees, attorney costs, and potential tax liabilities.
  • Foreign LLC registration is an alternative to domestication, allowing businesses to operate in Florida without moving their legal home state.
  • A business attorney can provide crucial assistance to ensure smooth domestication and compliance with Florida laws.

Does Florida allow domestication of LLC? This is a question for those owning an LLC and planning a move to Florida. Domesticating your LLC means changing its location. If your new state allows it, it is a convenient option with many benefits to your business.

Flexibility is probably one reason you set up your business as an LLC in the first place. An LLC is a business structure that gives you relative freedom to decide how to best organize your company. So if you are moving your LLC out of state, you are likely looking for a flexible, convenient way to do so. Domestication may be the answer.

Why Domesticate an LLC?

There are benefits of domesticating your LLC, as opposed to dissolving it and creating a new LLC in your new state.

Domesticating your LLC — an option allowed in many states, including Florida — makes it easier to keep your existing business relationships. That's because you won't have to renegotiate or amend your contracts.

It also makes it easier to get loans and lines of credit in your new state: rather than building new credit history from scratch, you can retain the age and business credit history you've worked hard to build in your original LLC.

Benefits of LLC Domestication in Florida

Florida's LLC domestication process offers several benefits over dissolving and re-establishing your business in the state:

  • Continuity of Business Operations: Your LLC retains its EIN, business relationships, and operational history, minimizing disruptions.
  • Contract and Agreement Stability: Existing contracts, leases, and service agreements remain intact, reducing the need for renegotiations.
  • Tax Efficiency: Avoid potential tax implications that arise from closing and reopening a business.
  • Brand and Reputation Preservation: Keeps your established name, branding, and goodwill without needing to reintroduce your company in a new market.
  • Simplified Compliance: Your business avoids double reporting and fees that come with foreign registration.
  • Access to Florida’s Business Environment: Benefit from Florida’s pro-business climate, including tax advantages and reduced regulatory burdens.

Is Domestication the Right Option for You?

If your state allows domestication and you're wondering if it is your best option, think about where you'll do business after you move:

  • If you'll still do business in your old state, you may want to keep your LLC based in that state. (Many states permit LLC members to reside outside the state where the LLC is registered.)
  • If you only plan to do business in your new state, you can either dissolve your old LLC and create a new one or domesticate your original LLC in your new state.
  • If you plan to do business in multiple states, you'll need to have your LLC registered everywhere you do business. Register as a foreign entity in all states where you plan to conduct business outside the state where your LLC is based.

Key Legal Considerations Before Domesticating an LLC in Florida

Before initiating the domestication process, consider the following legal factors:

  • State Laws and Requirements: Florida allows LLC domestication, but your current state must also permit LLC conversions.
  • Tax Implications: Ensure you comply with both federal and state tax regulations. Florida does not impose a personal income tax, which may be beneficial.
  • Business Licenses & Permits: You may need to reapply for local licenses or update permits required in Florida.
  • Registered Agent: Your LLC must designate a registered agent in Florida for legal and tax correspondence.
  • Operating Agreement Review: Amend your LLC’s operating agreement to reflect the new state’s compliance rules and regulations.

How to Domesticate Your LLC

To domesticate your LLC, the state business entity registration agency in your new state will need an articles of domestication. Within this document will be a plan of domestication, where you typically will:

  • note the new LLC jurisdiction
  • outline any changes to your business's articles of organization
  • define how you will transfer ownership interest from your original LLC to your domesticated LLC.

You may also need to give your state a certificate of good standing and a $30 to $50 fee, depending on state requirements.

Next, you'll need to:

  • provide the IRS with Form 8832 and indicate that your LLC has been domesticated
  • register with your new state's tax collection agency
  • pay sales tax in your new state (if your LLC is a service or retail sales company).

If you need help with domestication of an LLC, 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 like Google, Menlo Ventures, and Airbnb.

Step-by-Step Guide to LLC Domestication in Florida

Domesticating your LLC in Florida involves several crucial steps:

  1. Verify Eligibility: Confirm that both Florida and your LLC’s original state allow domestication.
  2. Prepare Articles of Domestication: File this document with the Florida Division of Corporations.
  3. Obtain a Certificate of Good Standing: Your current state must issue this certificate to verify compliance before moving.
  4. File Required Documents in Your Original State: Some states require a certificate of conversion or a similar filing.
  5. Transfer Business Records: Ensure all ownership, tax, and operational records reflect Florida as your new jurisdiction.
  6. Register for Taxes in Florida: File for a new state tax ID if required.
  7. Update Licenses and Compliance Documents: Modify all necessary regulatory permits and agreements.
  8. Notify Stakeholders: Inform clients, vendors, and financial institutions about your business relocation.

What If Your State Doesn't Allow Domestication?

If either your home state or the new state doesn't offer domestication, you can dissolve your old LLC and create a new one in your new state.

You'll need a business attorney to help you because it can get complicated. The process involves things like liquidation, merging, and transferring membership interests from one LLC to another.

Alternative Options for Moving an LLC to Florida

If your current state does not permit LLC domestication, consider these alternative approaches:

  • Register as a Foreign LLC: Instead of relocating, your LLC can register as a foreign entity in Florida while maintaining its original formation state.
  • Dissolve and Form a New LLC: Close your LLC in the original state and form a new Florida LLC, but be mindful of legal and tax implications.
  • Merge with a Florida LLC: If you already have a Florida-based business, merging the existing and new LLCs can be an option.

Each option has distinct legal and financial consequences, so consulting a business attorney is recommended.

What to Do After the Move

Remember to review any vendor and partner contracts you've signed in your LLC's old name. Its official name includes the state where it was formed (so the full name of XYZ, LLC formed in Ohio would be "XYZ, LLC, an Ohio Limited Liability Company"). Therefore, moving to a new state will change your LLC's full name—and you'll need to make sure all your contracts reflect the new full name.

Final Steps After LLC Domestication

After successfully domesticating your LLC in Florida, complete the following steps:

  • Update Business Documents: Amend operating agreements, contracts, and financial records to reflect the Florida entity.
  • Register with the IRS (if needed): If your tax classification changes, update IRS records accordingly.
  • Inform Financial Institutions: Notify banks, creditors, and lenders about the change in business location.
  • Update Your Website and Marketing Materials: Ensure all public information reflects your Florida presence.
  • Comply with Florida Annual Report Filing: File your LLC’s annual report with the Florida Division of Corporations.

Frequently Asked Questions 

1. Does Florida allow domestication of an LLC?

Yes, Florida allows LLC domestication, enabling businesses to relocate their legal registration without dissolving and reforming.

2. How long does the LLC domestication process take in Florida?

Processing times vary, but typically, domestication can take a few weeks to a few months, depending on document preparation and state filing times.

3. What is the cost of domesticating an LLC in Florida?

Florida's filing fee for LLC domestication varies but generally ranges between $150 and $300. Additional costs may apply for legal services and document retrieval.

4. Do I need a registered agent when domesticating my LLC in Florida?

Yes, Florida requires all LLCs to have a registered agent with a physical address in the state to receive legal documents.

5. Can I domesticate my LLC without an attorney?

While it is possible to domesticate an LLC without an attorney, legal guidance is recommended to ensure compliance with state laws, tax regulations, and contract updates.

Finally, don't forget to inform your customers of the move — even if you're primarily an online business. It's in your best interest to make sure they hear about it from you first. Tell your customers why you moved your business and reassure them that the move won't affect them. Or, if there will be a positive impact on them, let them know the benefits they'll enjoy.

If you need help with understanding about LLC domestication, 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 like Google, Menlo Ventures, and Airbnb.