Moving your LLC to a new state doesn’t have to be difficult. Transfer your LLC to another state with the guidance of our experts.
One of the benefits of running your own business is choosing where you want to work. The process of moving your LLC from one state to another will vary depending on the type of business you own, the states you are moving between, and your desired business goals. You can choose to transfer your LLC from one state to another, establish a foreign business entity, dissolve your current LLC and start a new LLC in another state, or merge two existing LLCs in different states. The following article will cover the different options to move your LLC to another state.
An LLC (limited liability company) can be taxed as a corporation, partnership, or sole proprietorship in any state. Because the states have varying personal income and corporate income tax rates, an accountant should be advised to avoid any potential tax consequences and manage annual reports when moving your business.
The domestication/ conversion process is a seamless transition of your LLC’s existing business accounts, credit rating, tax id information, and previous business relationships from your old state to a new state. In order to establish a permanent business address and business license through the domestication process, business owners must complete the following steps:
The first step to move your LLC to a new state is visiting the Secretary of State office in your old state and obtaining a Certificate of Good Standing. A Certificate of Good Standing is a one-page document that provides proof of your status as a business entity and lawful compliance.
Next, you will need to draft a plan for domestication. A sole proprietorship can draft and approve their own plan for domestication, while multi-member LLCs must receive approval for every owner. The Articles of Domestication, Certificate of Good Standing, and an Articles of Dissolution (not yet filed with the old state) must be filed with the Secretary of State or other state agency in your new state.
After receiving approval for domestication in your new state, the final step is to dissolve your business in your old state. After filing your Articles of Dissolution with your old state, the approved documentation should be sent to your new state to submit proof of closure.
Foreign registration allows business owners to obtain business licenses and a permanent business address to operate in other states while maintaining residency in the state their business was originally formed. By registering as a foreign entity, business owners can use the same EIN (Employer Identification Number) and bank accounts, but will pay different taxes and fees depending on the state laws where they reside.
To register as a foreign entity, you must submit a copy of your original state’s Articles of Organization alongside a Certificate of Authority from your new state. These documents must be submitted to the state agency in charge of business filings to determine that criteria is met for foreign qualification. Your LLC will need to have separate registered agents for each state that your LLC business operations take place to manage the different state annual reporting requirements.
If you are unable to domesticate your business and you do not want to conduct business as a foreign entity in your new state, you have the option to dissolve your LLC in your old state and then register your LLC in your new state. Dissolution is the official legal process of closing a business. You will need to file an Articles of Dissolution with the Secretary of State or other state agency to document the distribution of assets, liabilities, and debts in order to legally dissolve your business.
In addition to filing forms with the state, the other steps in dissolving a business include winding down business, selling remaining inventory, notifying creditors, paying off debts, and liquidating any remaining assets. Due to the complicated nature of dissolving a business, it’s wise to use a business attorney to ensure legal guidelines are followed.
Most states allow your old LLC to be merged with your new LLC so that your assets and liabilities can be transferred rather than dissolved. While this can be a cost-effective way to move your business operations, federal and state tax laws in each state need to be considered and a tax advisor should be consulted before proceeding with a merger.
To merge your old LLC with your new one, you’ll need to draft an Articles of Merger and file it with the Secretary of State or the appropriate state agency in your state. Once the Articles of Merger is filed, the LLC in your old state dissolves and its assets and liabilities merge with the LLC in your new state.
We offer an LLC formation service and many other services to meet your business needs. With help from our team of experts, you can start an LLC today for $0. We provide information, live support, and a step-by-step process to form an LLC in your state today. Rather than guessing and stressing, let us do the work for you!
Disclaimer: The content on this page is for informational 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.
Yes, you can move your LLC from California to another state. LLCs in California pay an $800 minimum annual franchise tax regardless of how much business is conducted in or out of state. If you no longer need to operate your business within the state of California, it could be cost effective to go through the domestication process in the new state, or dissolve the LLC and form a new LLC with the new state.
There is no limit to how many LLCs you can have as long as they are distinctly separate businesses. As long as the correct LLC filing and fees are processed for each LLC in each state, having multiple LLCs in multiple states is possible.
When operating multiple LLCs in multiple states, the cost of appointing registered agents for each state, state taxes, LLC registration fees, and the varying legal requirements to operate a business within each state must be considered to make a wise choice for your business.
At the time of this writing, California is offering free LLC formations, while Colorado is offering LLC formation for only $1. However, this is likely temporary. Ordinarily, Kentucky has the lowest state filing fee of $40 compared to the highest filing fee of $520 for Massachusetts. Although LLC formation cost is significantly cheaper in some states, other factors such as maintenance costs and annual taxes should be considered as well when starting an LLC.
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