Domestication refers to the process of moving a company's legal registration or incorporation from one state to another while maintaining its existence as a single entity.
Starts at $0 + state fees and only takes 5-10 minutes
Domestication involves actually moving the legal organization from the original state to the new state. Once the company is domesticated, the company can’t do business in its original state.
What are domestication’s advantages over foreign registration? To begin with, it is cheaper to do business in one state than in two. If you do your research, you may find a new state to domesticate in that has lower corporate, sales, income, and franchise taxes than your old state. States also vary widely in how much they charge in filing fees, such as for annual reports. And again, paying once is better than paying annual fees in your original and foreign registration state.
The domestication process can be expensive. Because the definition of domestication and the requirements for accomplishing it vary from state to state, it also is a complex undertaking.
And again, it’s not offered in every state, so if you’re moving from Florida (which allows domestication) to Hawaii (which does not allow domestication), your corporation cannot follow you.
Though the process may vary based on state legal requirements, the general domestication process is as follows:
Of course, you also must pay any fees required for these filings. And after you have domesticated your company, it’s wise to update your operating agreement or other governing documents.
Domestication can be a good way for a business owner to legally relocate a small business to another state. Just make sure your original state and the new state allow domestication.
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Once you domesticate in your new state, our worry-free compliance service can help you keep track of annual filing deadlines and other requirements to keep your LLC in good standing. If your LLC or corporation needs a registered agent in your new state, we can help you find one.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Written by Team ZenBusiness
ZenBusiness has helped people start, run, and grow over 700,000 dream companies. The editorial team at ZenBusiness has over 20 years of collective small business publishing experience and is composed of business formation experts who are dedicated to empowering and educating entrepreneurs about owning a company.
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