Does Florida Allow Domestication of LLC
Does Florida allow domestication of LLC? This is a question for those owning an LLC and planning a move to Florida.3 min read
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.
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.
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, Stripe, and Twilio.
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.
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.
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.