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Top 3 Ways to Move Your Business Entity to Florida

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By Monday, 15 March 2021 01:08 PM Current | Bio | Archive

Relocating an LLC or other type of company to a new state poses a variety of challenges, from regulatory compliance to maintaining continuity of operations. For companies considering such a move, Florida has long been a popular choice among savvy business owners due to its advantageous tax structure.

Several standard methods exist to fully or partially move your company to Florida from another state. Each approach has its own advantages and disadvantages, so it's worth taking some time to review the three main options before implementing the change.

1. Transfer the Entity From the Old State to the New

For business owners planning to move to Florida permanently, it often makes sense to establish the Sunshine State as the new center of operations for their entities. Florida makes this process easier than some other states by allowing businesses to domesticate there.

Domestication requires three major steps. First, the business owner must obtain a Certificate of Good Standing from the current home state of the company. This document assures the state of Florida that the business rests on solid compliance ground.

Next, Florida requires the filing of two documents with its Division of Corporations. A Certificate of Domestication establishes the owner's intention to domesticate an existing business, while Articles of Incorporation (or Organization) document the entity's legal form and structure.

Finally, upon receiving confirmation that Florida has accepted these filings, the owner must then dissolve the business entity in the original state. While this action does not necessarily prevent the company from continuing to conduct some business in the former state — usually as a "foreign entity" (more on that in a moment) — maintaining operations in that state will require keeping a registered agent there.

For many companies, the greatest appeal of domestication lies in the prospect of complete operational continuity. In a properly executed domestication, bank accounts, tax ID numbers, public records, and credit ratings all carry over to the newly established Florida company.

2. Close the Business and Form a New One

Continuity offers many benefits, but there are cases in which the best approach to a business relocation is to make a clean break. For example, if an existing company has had tax, regulatory or negative publicity problems, nothing is gained by preserving the status quo.

Business owners in this situation may fare better by permanently closing the existing company and creating a brand new entity in Florida. While this process will not erase the need to resolve any issues persisting in the original state, it can help to contain them.

Dissolving one company and starting another does involve some additional administrative work, including obtaining a new tax ID, opening new bank accounts and filing new organizational documents in Florida.

3. Keep Your Business Where It Is & Authorize It in Florida

Florida allows companies based elsewhere to conduct business within the state as "foreign entities." Generally, in order to operate under this classification, the owner of an LLC or other entity must simply file the required form with Florida's Division of Corporations.

Operating as a foreign entity in Florida has the clear advantages of swiftness and simplicity. This approach especially merits consideration when a move to Florida may not be permanent.

Be aware when using this technique, offices and accounting records will be required in both Florida and the home state.

Conclusion: Finding the Best Fit

While many factors determine the ideal strategy for relocating a business entity to Florida, when seeking guidance on the most beneficial relocation strategy for your business, clarity of long-range plans and the degree to which continuity is desirable are critical considerations in ensuring the best possible outcome.

This article is not tax, legal, or other professional advice and cannot be relied upon for any purpose without consultation and advice from a retained professional.

As one of the most knowledgeable and well-connected tax & accounting professionals in the world, Harvey Bezozi's mission as a CPA and CFP ® is to provide concierge-level work product and service, along with seamless communication, high energy, and a super-positive attitude. Located in Boca Raton, Florida, Bezozi has been in business since 1994, and serves clients in all 50 states and internationally. More information can be found at YourFinancialWizard.com

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HarveyBezozi
For companies considering such a move, Florida has long been a popular choice among savvy business owners due to its advantageous tax structure.
business, florida
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2021-08-15
Monday, 15 March 2021 01:08 PM
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