Serving all 50 states with local offices in California, Florida, Illinois, Nebraska, New Mexico, Tennessee, Texas, and Virginia.
 Call Us (888) 992-4952
  My Account        0 items -$0.00

How Do You Move a Company to Another State?

The analogy I like to use with clients, is that when you form a company in one state, it’s like having a child in that state. You can certainly bring that child to a new state, but that child’s birth certificate will always be of the state where he or she was born. A company is similar. You cannot simply move your company from one state to another, as a company formed in one state will always be a company of that state, without doing things carefully (depending on which states are involved). If you formed a New Mexico limited liability company, it will always be a New Mexico limited liability company, even though you moved to Texas or New York. Because of this, you can create some unintended tax consequences, as well as uncertainty around liability issues, if you’re not very careful when you move a company.

If you’re moving to another state, and you want to take your company with you, you have three (maybe four) options:

  1. Foreign LLC. File your company as a “Foreign Company” in your new state, keeping your existing company “as is.”
  2. Asset Purchase. Form a new company in your new state, have that company acquire all the assets (and liabilities) of your old company, and then close (i.e. dissolve) your old company in the original state it was formed.
  3. Merger. Same as #2 above, but before you dissolve your old company, “merge” it into the new company in your new state.
  4. Domestication. Finally, same as #3 above, instead of “merging,” you perform what’s called a “foreign entity conversion” (only supported in some states — and the states need to cooperate).

Each of these options as its pros and cons.

Move a Company by Filing a “Foreign Company” in you new state

This first option is the easiest and least expensive. What it means, technically, is that your company is registered in at least two states. It’s first registered in the original state it was formed in. If you created a New Mexico LLC, that NM LLC still exists. The foreign filing is NOT A NEW COMPANY. What it means, is that your NM LLC is now registered in your new state. If you moved from New Mexico to Texas, and you picked this option, you would have a NM LLC that is a Foreign LLC in TX. If you want help, we have low-cost, flat-rate fees for a Foreign LLC or Foreign Corporation.

The benefits to this, is that it’s very inexpensive and can be setup quickly. There are a number of problems, however, associated with this approach. First off, you’re still registered in New Mexico. If you do ANYTHING that can create a tax liability in NM, you’re still liable for that tax. For example, if your NM LLC is taxed under Subchapter S, you will still need to file a tax return in the State of NM. If you have any clients in NM, you will still need to collect NMGRT, report and pay NMGRT for NM-based clients.

The second issue is that technically, even though you have a “Texas Foreign LLC” in my example above, it’s still a “New Mexico LLC”. If you’re not careful with your contracts, you could be subject to NM law when you want to be subject to TX law. This can have unintended liability issues.

If you elect this option, please DO NOT FORGET TO HIRE A QUALITY, TRUSTWORTHY registered agent for your original company. You want to make sure your records are accurate, so that you continue to receive legal notices to your company’s registered agent from the old state. Note we can provide this service, see L4SB Registered Agent Services.

Asset Purchase: Forming a new company, dissolving the old company

This is perhaps the most popular way to move a company, and many business leaders gravitate towards this approach when they go off on their own without consulting an attorney.

What happens here, is that you simply abandon your old company and start over. The disadvantage to this approach, is that you’re abandoning the old company’s FEIN and any credit it may have established and built-up over the years.

The advantage is this approach generally straightforward — but you need to be careful. We attorneys will discourage clients from simply abandoning a company formed in any state. Some states have specific procedures to be followed to close a company properly, and if not followed, can accumulate fines and penalties over time, which could become quite extreme. If you want help, we do have low-cost, flat-rate fees to help you dissolve a LLC.

Additionally, if you don’t close your company properly, the company (and you personally) can run the risk of “default judgements” from lawsuits that were served on a registered agent in your old state that wasn’t updated when you moved. If a lawsuit named you or other owners in the lawsuit personally, you could personally be liable for a default judgement in your old state — a judgement that will probably not be able to be removed — and the plaintiff could then seek to come after you in your new state.

Therefore, if you’re going to move a company with this approach, please follow these steps:

  • Figure out the proper steps to close your company in your old state. This varies state-by-state, as well as the type of entity you’re trying to close. Note that “dissolving” your company is just one step necessary to close your company. Other steps may include obtaining a tax clearance certificate from your state’s taxation department, calling a vote of all the owners, paying off all liabilities, and more. To make sure you do this right, we strongly encourage you to talk to a competent business attorney in your state.
  • Form a new company in your new state. You want to form the new company BEFORE dissolving the old company. This is because you want to formally transfer the assets and liabilities of the old company to the new company, while the new company is still in existence. We can help form your new limited liability company (or LLC) or Corporation, if you want professional assistance.
  • Follow those steps identified in the first step. It bears repeating: Don’t formally dissolve the old company, until you’ve formally transferred all the assets and liabilities to your new company. To transfer assets and liabilities, you want a formal “Asset Purchase Agreement” and “Bill of Sale” that outlines the purchase price, assets and liabilities being transferred. This is important for tax reasons, and helps to establish a cost-basis for the new company. Beware trying to transfer asset that are encumbered, or trying to walk away from liabilities — simply trying to put assets into a new company can expose the new company to claims of “fraudulent transfer” or “successor liability.”
  • Obtain a new FEIN. You cannot use the old FEIN for your new company. Don’t even try. Just get a new FEIN, and open up new bank accounts, merchant accounts, etc.
  • Obtain a new business license. As appropriate for the new state. Don’t forget that different states have different laws about a great many things. If you’re a contractor in one state, do not assume your contractor license will transfer over. Also, don’t assume a “city license” is the same thing as a contractor’s license, or the way the new state handles licensing is anywhere close to what the previous state did. This is a good time to consult with a business attorney in your new state.
  • Don’t forget to notify the IRS. If you have a corporation, be sure to file Form 966 for corporate dissolution / liquidation. If you have a LLC taxed as a partnership, make sure you check the “final return” checkbox on your last tax return for the company. Finally, read this letter from the IRS regarding Canceling or Closing an EIN for a Closing Business: Canceling an EIN and Closing Your Business Account.

Merging old company into a new company

The third option preserves the FEIN and credit established of the old company. The downside is that it costs more, because it involves all the steps of the above (i.e. “Forming a new company, dissolving the old company”), but it also includes filing appropriate “Articles of Merger” and paying the appropriate fees in the new state, so that the old company “mergers into” the surviving entity, that entity being the new company formed in the new state.

This will usually require proving the company is in “good standing” where it’s coming from, so if you owe back taxes or the company is “not in good standing,” you will want to fix this.

Follow the same steps as above, except you want to perform the merger before closing and dissolving the old company. When done, the old company will no longer exist, and the new company in the new state will become the company that takes over everything from the old company.

Move a Company by Domestication: Foreign entity conversion

Some states (not all) have what’s called “Foreign Entity Conversion Statutes” on the books. There is very little uniformity between the states on this, so you need to do your research — and this is where a local business lawyer in your target state would be helpful.

If a state permits this, there may be limitations on the type of entity that may be converted (i.e. a LLC or Corporation), and some states have limitations on where the incoming company is from. Again, you will need to do your research.

If such an option is available in the state you want to move to, and your company is permitted (i.e. type of company and the state where it’s domesticated), then you can follow that state’s procedure to do convert your company from State X to State Y.

The benefit of this is it is usually less expensive than the merger, and you preserve the FEIN, the company’s credit, etc.

Don’t Be Overwhelmed! Let L4SB Move Your LLC for You!

L4SB now offers a flat-rate, low-cost service offering to move a company from one state to another. You can learn more, see pricing, compare options and order from the following link:

This service is experimental — it’s really hard to calculate all the different pricing and availability, given the options depend greatly on what you want and the states involved. Please pardon our dust!

[MODIFIED: This article was modified on June 25th, 2019, to address additional IRS considerations and the possibility of foreign entity conversion.]

Law 4 Small Business, P.C. (L4SB). A little law now can save a lot later. A Slingshot company.

28 comments

  • Salam Jazrawi /

    Hi Larry

    I have my LLC in Kansas City and I moved to Florida and start working as sub contractor for a company under my LLC in Kansas City. my question is do I need to register my LLC here as well?

    • Probably. If you’re doing work in the State of Florida under a LLC, then that LLC should either be moved (which means the LLC would then be registered in FL, not KS) or you should “foreign file” your KS LLS in FL.

      Larry.

  • Henry William Bothwell /

    Hey Larry,
    Great article, really answered my question about re-locating my business. I currently have an LLC in PA and was thinking at some point I would move it to NV. I am working on establishing (non brick and mortar home services business) locations in various states, but I want to base the LLC where I can avoid most taxes and I thought NV would be the place. My question is: what is the best state to base my LLC where I pay the least possible taxes, etc.?
    Thank a lot, Henry
    ps When the time comes to do this, I will certainly hire you to take care of it, and also perhaps handling the paperwork and details of setting up shop in other states.

    • Hi, Henry.

      Thank you for reaching out to us. The issue with taxes is very complicated, mainly because it’s not very easy to “forum shop” on taxes, because where you pay income taxes depends on where you’re conducting or transacting business, and every state has its own rules around that so it’s hard to give you an absolute rule.

      For example, if 20% or more of your business comes from one particular state, you’re probably doing business in that state. If you’re “purposefully availing” of a state somehow, such as advertising into just one or two states, versus a state-neutral marketing campaign, could be viewed as “doing business” in those states. If you have a W2 employee somewhere, you’re doing business in that state.

      The list goes on and on.

      So, even if you relocate to NV, the question is, “Where are you conducting business?” If you’re going to conduct business in your home state of PA, you may need to register your newly moved LLC from PA to NV, back in PA and pay the proportion of income taxes related to PA.

      However, the analysis is actually more complicated than that, because it depends on how the LLC is taxed. If it’s taxed as a C-Corporation, you’re subject to corporate income tax in all the states you’re conducting business.

      If you have a pass-through entity, the company actually passes the profits / losses to you directly and you pay personally. NV could make a good state, but you may still need to file partnership returns in the other states you’re doing business in — and even though you may not have income tax liability, you still need to file and may need to pay various franchise or other annual fees.

      In short, my recommendation is to talk to a good CPA who can advise you on this, given where you’re “conducting business” and the most favorable tax status for your LLC.

      Larry.

  • Hi, my S Corp was incorporated in Nevada and has been doing business in CA as a foreign entity (Registered, paying $800 corp tax every year for the past 5 years). I now want to move my S.Corp to CA permanently and not have it registered in NV anymore. This means that I want to “close out” my S Corp in NV and not have to pay NV renewal fees every year anymore.

    I want to be able to keep the S Corp name, FEIN, bank account #, credit card # etc.

    Is this possible – to your knowledge? What this the process? and how much do you charge? Thanks so much for your helpful article

    • Hi, Quyen.

      The answer is “yes,” you can do this. Unfortunately, NV doesn’t yet support domestication so your only option is merger. You can learn more and order from our Move a LLC page.

      The only issue, is this page is for a LLC and you have a Corporation. We don’t yet have a Corporation page up, as we’re still working on. The LLC page pricing is about right, although the filing fees can closing fees can be different for Corporations. If you ordered your move through our LLC page, we’d honor our fees, although the filing fees could change. We’d either give you a partial refund if our system ends up charging more, or we’ll generate an invoice if our system under-estimated the state fees.

      Thank you. Larry.

  • Larry,
    Please tell me, by what means, if any, a Florida LLC can be moved to Virginia and maintain its FEIN.
    Virginia does indeed provide form and instruction for LLC domestication.
    Does Florida provide any such form or instruction to effect an exit?
    Thank you very much for help.
    David

  • Hi Larry,

    Thank you for a great & informative article!

    I currently operate an LLC in California and will be moving to Washington State in early 2020. The “foreign entity conversion” approach sounds like it might be the most desirable due to being able to retain the FEIN / credit history and other business operations without completely starting over.

    Do you know if this would be allowed for my move from CA to WA, and if not, what approach would you recommend?

    Thanks again!
    Randy

    • Hi, Randy.

      Thank you for your question. Unfortunately, I don’t have an answer for you just yet — but I have an associate attorney working on this right now. What I mean by that, is we’re doing the research (for all 50 states) to figure out which states permit what, and then we’ll have a tool that will be able to give you options and costs depending on what type of company you have, what is your target state, and what is your old state.

      I’m hoping to push this out in the next 30-days. So, if you can check back with us around this time next month, our website should be able to answer that question for you.

      Thank you. Larry.

  • Your article was great! Thank you. I have a California S Corp established in 2015. As of 1/1/19, I registered as a foreign entity to do business in Arizona (my company and I moved there). Now that I will be staying in Arizona for sure, I want to permanently convert my CA S Corp to an AZ S Corp. Can you confirm that I can do an Arizona Statement of Conversion and once it is approved, I can then dissolve the CA S Corp without any IRS or state tax issues?

    This will allow me to keep my business name, bank accounts, FEIN, etc, correct? I’m hoping it is this simple… Thank you so much in advance.

    • Hi, Grace.

      Thank you for your question.

      Unfortunately, I cannot verify that yet. We’re working on a product called “Move My Company” that will, based on your target state, domestic state and objectives, give you different options. It will confirm what you can do, and provide a low-cost, flat-rate fee to do it.

      Please check in, within a month or so. Hopefully, we’ll have the service available by end of October at the latest.

      Thank you again. Larry.

  • We have a FL corp and registered it in Ga when we moved here. We are now leaving GA and would like it to be ONLY a FL Corp. What do we do about GA? Do we dissolve the GA Corp? Thanks!

    • Hi, Tanya.

      Thank you for your question. It sounds like you formed a Corporation in Florida, and then registered it in Georgia as a Foreign Corporation in GA. What you need to do, is dissolve the GA Foreign Corporation, as well as check in with the state’s taxation authorities to make sure you’ve taken care of any tax liabilities for the state. If you have employees in GA or other liabilities, you may need to deal with those properly as well. We are not licensed in GA, so you really need to find a GA licensed business lawyer to give you a checklist on other activities you may need to do to properly shutdown activities in GA.

      Larry.

  • Hi Larry

    Quick question about merging a business. I am currently incorporated in Massachusetts and doing business in Rhode Island as a foreign entity. I would like to merge the business completely to Rhode Island so that I don’t lose the FEIN number or any assets and credit I have acquired over time. My question is would I need to still form a new company in Rhode Island even though I am already registered as a foreign business there? I am assuming I would, and I am going to reach out to my business attorney in MA for the process, however I would like to get another base opinion on the whole situation.

    Thanks again for the information you’ve provided on this website, it has been incredibly helpful!

    • Hi, Monica.

      Apologies for the delay in responding. It’s been a busy month.

      The quick answer is yes, you would still need to form a new company in RI, even though you’re already registered there as a foreign company.

      There is a caveat, however, and I don’t quite know the answer to this because I am not a licensed attorney in RI or MA, and that is: Some states have what is called “foreign conversion” statutes. It permits you to “move” a company, simply by (1) doing what is needed for a “foreign conversion” in the state, and then (2) dissolving the old company. This would potentially work, if RI would permit this. It’s something you’ll need to look up.

      Larry.

  • Marlene Oosthuizen /

    I have a TX formed LLC which was qualified as a Foreign Entity in TN (to be able to do business in TN) – we’ve been doing this for 2 years now and now we’ve decided that we want to stay in TN only (we will not do any business in Texas anymore). We will be living in TN permanently – I don’t want to loose the FEIN and credit history – how can I do this?

    • Hi, Marlene.

      Thank you for your question (and I apologize for the delay in responding).

      The blog article has the answers to this. You need to do a “foreign entity conversion” if TN permits this, and failing that, do a merger. This will perform the “move” you’re seeking, and preserve your FEIN and credit history.

      Good luck to you. Larry.

  • michael ruocco /

    Hi thanks for sharing this. So I have an S Corp in New York, and would like to:

    – move the company to Florida.
    – keep the same company name
    – keep the same FEIN / TIN
    – keep the same banking router / account number for the business (my bank has locations in both NY & FL)

    Is this feasible by merging old company into new?

    • Hi, Michael.

      The short answer is “yes.” It appears Florida supports “foreign entity conversion,” so you can do this and move your NY Corporation to FL. Note that if someone else is doing business in FL under the same company name, you may need to change your company name.

      Larry.

  • I’ve got a MA corporation and now live in NH. I want to shut down the MA corp and incorporate a new business in NH. It’s a small business and the only assets are a car and about $25k in the bank.

    If I choose your Option 1, how do I deal with the assets? I’m assuming that the assets revert to the shareholders (me). If so, how do I get them into the new business (to continue to take depreciation, etc.)

    Given that, I am assuming you suggest Option 3 and merge the assets into the new corporation, is that right?

    • Hi, Bob.

      I think you should consult with a CPA on this. Typically, you can do an “asset purchase” of the business, and that means your NH business would obtain all the assets and liabilities of the MA corporation. The problem is, there are tax implications that you need to fully understand and deal with, and that’s where the CPA comes in.

      You are right, that Option #3 would basically move your company to NH, along with its assets and liabilities.

      Larry.

  • I want to do option 3, merge. I can set up a corporation in my new state – but do I need a new FEIN number for that? If so, I now have two FEIN numbers. How do I get rid of the new one if I want to keep the old one?

  • Tamika Singleton /

    I have my company as an LLC registered in Louisiana n want to move it to Fl change it as a proprietor. What’s the best way to do this?

    • Hi, Tamika.

      I’m not sure what you mean by “proprietor.” If you mean “sole proprietorship,” then you simply need to dissolve the LA LLC, and start doing business as a sole-proprietorship in FL. If you have assets, you may need to do something to transfer those assets from the LLC to you personally, and that could create some tax implications for you. Make sure you consult with an attorney or CPA in FL to help you with that.

      Otherwise, if you want to do business under a LLC in FL, versus LA, then you need to follow one of the suggestions in this blog article.

      Larry.

  • Good morning,

    I have a question about my company that I have registered in another state (California).
    I now live in Colorado and would like to transfer my business to Colorado as I will not be moving back to California and Colorado is where I will be residing.
    What is the proper way and easiest way to go about doing this, i’m assuming it is not a hard process, but just want to make sure i’m doing it the right way

    Please let me know, Thank you

    • Hi, Sharon.

      Thank you for your question. Some states, such as Colorado, permit a foreign company (like a CA LLC) to be “converted” into a domestic CO LLC. Not all states permit this, and some states have restrictions on what states they will permit to do this. It’s complicated.

      So, in your specific circumstance, you can either do what’s called a “conversion,” which would entitle converting your CA company into a CO company, and then dissolving the CA LLC. What would remain is a new CO LLC.

      Alternatively, you can do a merger which I describe above. I would recommend hiring a good CO business attorney, to make sure this is done right for you.

      Larry.

Leave a Reply

Your email address will not be published.

top