You may have a lot of reasons to relocate, but if you own a limited liability company, you are left with the predicament of how to transfer LLC to another state. That is, if you plan to move your business with you. There are a few possible options that you can implement in this situation, and you have to determine which one is the best for you.
You can transfer your business to another state, or you can keep the old LLC and register a foreign one for the temporary move to another place. There is also a possibility of dissolving the old enterprise and opening a new one in the other place of residence. All of these options have a different approach and include different rules, so tread carefully and consider all the possibilities.
Transfer Your LLC From One State to Another
This process is called domestication. What is important to know is that not all of the states allow domestication, and the procedure includes both states in play, your previous company and the future one. You should check if domestication is possible on both ends. Here are all the those that allow domestication of an LLC: Arizona, California, Colorado, Delaware, District of Columbia, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maine, Mississippi, Nebraska, New Hampshire, New Jersey, Nevada, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia, Washington, Wisconsin, Wyoming.
What this means for you is that you are going to have to fill the form for the certificate of good standing in your previous place of residence and file it. Then you’ll fill the form of domestication for the current one and submit both documents to the agency in charge.
Advantages and Disadvantages of Transferring Your Company
The main advantage is that you will keep most of your business’s installments. You will hold the same bank account, your current credit rating, and tax ID. And if you obtained all those once before, you know how much time you need to spend on getting them. The main disadvantage is that it is impossible in some states.
Keep Your Old LLC and Register a New One
If you plan to move for a specific time, not permanently, maybe your best option is to keep an old company and open a new one in the community you are moving to. You can register as a foreign entity there without dissolving the previous venture. That has many advantages, but it costs more than double then running a single business. You will have to pay the fees for both of the companies, and for the registered agent who will run the affairs in your absence. You’ll also need to meet all the criteria to form a foreign enterprise in your future place of residence. Some states impose a franchise tax for all the foreign LLCs.
The Pros and Cons of This Arrangement
The disadvantages of this kind of arrangement are apparent. You need to pay more for holding two companies, that is clear. You need to find a reliable registered agent to run your business back home and pay for his services too. But there are many, not so distinct advantages. You get to keep all the installments of your previous enterprise just the way they are. Be that as it may, this solution is working in your favor only if you plan on returning to your previous place of residence. If you return you’ll have your current account, registered address of the company, tax ID and credit rating waiting for you to lift off from where you left it.
Dissolve Your Old LLC and Register a New One
If you are aiming to move permanently from one state to another and are not keen on paying double taxes, then dissolving your previous enterprise and registering a new one is the best option for you. It is the way to cut costs significantly, as opposed to the previous option. When should you do this? If you are moving your life and business permanently from one place to another and you are not planning to go back to your previous community. Also, if you are not planning to branch your enterprise in multiple states, it is time to dissolve your company. What does this mean for you? This is a process that is better to leave to professionals because omitting even one step can cost you a lot. It is better to seek assistance from an attorney. You are going to have to fill a different tax ID form, different bank accounts for your business, and there is a possibility of losing the good credit rating that you have built through the years.
The Advantages of Starting an LLC in Your New State
While it may seem harder to deal with the paperwork of dissolving one and opening an entirely new LLC, it does have some advantages that will benefit you. First of all, you won’t have to pay double, like in the previous arrangement, especially if you are not planning to return to your prior place of residence. Also, you will have the possibility to rebrand if you think that is something that will get your business going in another place. A different state means a lot of different regulations that are not always easy to adjust to. The only disadvantage is that you will lose all the installments of your previous business, but sometimes that is the only option that makes sense.
How Is This Related to the Success of Your Business
This is a choice that will make or break your fresh start. While each option offers a chance to benefit from a specific opportunity, sometimes it is not so easy to choose. If you are not sure how permanent your move is, maybe you should choose according to expenses.
Check the Most Recent Legislation
What is important to remember is that you do have options. Research each one carefully and consult the professionals to be in the loop with the latest legislation in both places. Sometimes if the legislation changed, the option that was best for you is no longer applicable, or you may benefit more from the other one.
No matter what option you choose for your enterprise, you will still need the help of professional movers to carry out your relocation. Contact a firm that is reliable and reputable and don’t forget to ask for a free quote.