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If you're considering moving your LLC (limited liability company) to another U.S. state, you have several excellent options. This article will guide you through the process, whether you intend to register the LLC as a foreign entity in your new state with the possibility of returning to your original state, or if you plan to file articles of domestication in your new state with no intention of returning. While the legal terminology, forms, and applications may seem daunting, rest assured that it's manageable. We'll provide a comprehensive walkthrough to ensure you're well-informed!
Guided Steps
Registering Your LLC as a Foreign Entity in the New State
Retain your LLC if you'll be conducting business in your previous state. There are scenarios where maintaining your LLC registration in your former state as a foreign (out-of-state) entity is advantageous. You'll need to fulfill reporting requirements, uphold licenses, and meet tax obligations in both states, but it's a viable option if your business operations will persist in the former state or if you anticipate returning soon.
- Be prepared for duplicative reporting obligations and the submission of any necessary annual documentation to each state.
- Your tax responsibilities may significantly increase. For instance, if your LLC was initially established in California, you'll owe an annual franchise tax solely for maintaining registration, even if your business generates no income in California.
Visit the website of the secretary of state in your new state. You can locate detailed information regarding foreign registration and access application forms on the secretary of state's website for your new state. Conduct an online search using keywords like 'business entities,' 'secretary of state,' along with the name of your state to locate the appropriate webpage.
Fill out a foreign registration application form. Locate a link on the secretary of state's website to the official application for foreign registration in your new state. Some states allow you to complete and submit the form online, while others may require mailing or in-person submission.
- You will need to provide details about your LLC's original registration, including its name, registration date, and the state of its original formation.
Choose an alternative business name, if needed. Different states have specific rules regarding the format of an LLC's business name. If your chosen name violates the regulations of the new state or if there's already a registered business with the same name, you'll need to select an alternate name. If necessary, input the alternative name in the specified field on the application form.
Select a registered agent for service of process in your new state. A registered agent is an individual or entity designated to receive legal documents on behalf of your LLC. You must designate a registered agent located in your new state and provide their information on the application form.
- Many business owners opt for a registered agent service. Search online to find a company situated in your new state.
Obtain a certificate of good standing from the original state. The terminology for this document may vary among states; your former state might refer to it as a certificate of status, existence, or facts. You can request this certificate from the secretary of state's website of your former state.
- You will receive a printable digital copy of the certificate. Print it out and include it with your foreign registration application if you're submitting it via mail or in person. If you're filing online, refer to your state's instructions to determine whether you should upload or mail the certificate along with any other required documents.
Submit your application and pay the required filing fee. Follow your state's guidelines to file the application online, by mail, or in person. Along with the application, you'll need to pay a filing fee, typically around $100 (USD). Processing times vary, but you should receive a certificate of registration within 5 business days.
- Some states offer expedited processing, with email notification and a digital certificate available in as little as 24 hours.
Acquire any necessary state or local permits. Depending on your business type, you'll need specific licenses to operate in the new state. For instance, if you're establishing a restaurant, you'll require permits such as a food service license, liquor license, certificate of occupancy, and other relevant permissions mandated by your new locality.
Migrating Your LLC to a New State
Confirm the eligibility for domestication in both your old and new states. While most states permit foreign business entities to domesticate, if either state doesn't allow it, you'll have to register as a foreign entity in the new state or form a completely new LLC.
- Starting a new LLC from scratch isn't ideal as it would entail losing your employer identification number and business credit history.
Fill out an application for articles of domestication. Visit the business entities section of your new state's secretary of state website to find the appropriate forms for domestication or conversion. Provide details about your LLC's original formation, its original and revised business names (if different), and the new business address in the new state.
- If your desired business name isn't available in the new state, you'll need to select an alternative.
Select a registered agent for your new state. Your business's registered agent receives legal documents on its behalf. You must choose a registered agent in your new state and provide their details on the conversion application form.
- Many business owners opt for registered agent services. Search online to find a company located in your new state.
Obtain a certificate of good standing. Request the certificate from the secretary of state website of your former state. This document confirms your business's existence, filing of necessary reports, and tax compliance. Include a copy of this certificate with your conversion application form.
- In some states, obtaining a certificate of good standing is free, while in others, it may cost between $10 and $20.
File the application and pay the required fees. Follow your state's procedures to submit the form online, in person, or via mail. Filing fees vary, typically ranging from $20 to $150. Upon submission, you should receive a registration certificate within a few business days.
- If you require expedited processing, you can pay additional fees to have your application processed within 24 to 48 hours, with expedited services costing up to $500.
Dissolve your previous LLC only after your application is approved. It's crucial to domesticate before dissolution. If you dissolve first and your domestication application is rejected, you risk losing your business entirely. The dissolution process varies by state but typically involves filing articles of dissolution with the secretary of state.
- Domesticating your LLC allows you to retain your bank accounts, credit history, and tax ID number. However, remember to update your business accounts with your new contact information.
- You may need to submit a certificate of dissolution to your new state as part of the domestication process.
Secure state or local licenses, if needed. Even after domesticating your LLC, you must obtain any licenses necessary to operate in your new location. These may include liquor licenses, food service permits, and signage approvals. Research online or consult legal counsel to understand the regulations applicable in your new jurisdiction.
Insights
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Transferring registration locations and converting or domesticating an LLC can be intricate and may have a substantial financial impact. It's advisable to seek guidance from a legal professional or accountant to ensure that relocating your LLC is financially advantageous.
