Sometimes, it becomes necessary for companies to relocate across state lines. There can be many reasons for this decision: wanting to be closer to your family, moving to a city with a lower cost of living, or a better quality of life for the employer and employees. Perhaps you want to open more horizons for your business.
Regardless of why moving a business from one state to another involves dealing with many crucial business relocation tasks. You should plan far ahead to manage the range of tasks in moving your business. Find a suitable space, apply for tax and other incentives, coordinate with your staff, send a message to your customers, obtain a business license, and, finally, the physical movement to another place. Besides these tasks, relocating the business entity requires different procedures for different businesses.
Moving a business from one state to another requires several tasks before the actual physical movement occurs. Review the logistical details of the state where you are planning to move your business. Look into taxation matters of the new state. You can hire services from an accountant or bookkeeper to do the paperwork. Look for tax incentives that may be available in the new place of business. Make a budget and pay close attention to your business’ bookkeeping.
Sole proprietorships and partnerships can easily be moved and registered in another state. A C corporation, S corporation, or Limited Liability Company (LLC) needs formal actions for the relocation process.
A sole proprietorship is easiest to move to a different state. You only need to register your new business by filing for a DBA “Doing Business As” as a new state registration process. At this point, you will discontinue your old business in the previous state. Depending on the state, your business will have to be registered at the county’s clerk office or government.
Limited Liability Companies (LLCs)
When your company is an LLC, it is better to hire an attorney when you want to move your business to another state. It is better to review your choices with an expert attorney’s guidance as things can get tricky.
Continue your LLC in the previous state
You do not merely end your LLC business entity in the old state. You will register in another state as an out-of-state LLC. You will also need to file for duplicate annual reports. This will make taxation matters complex. It will be more complicated if the LLC is a multi-member organization.
Close your LLC in the former state
Closing your LLC in your previous location will be less complicated when it comes to tax matters, and filing for duplicate annual reports will not be required.
Register a new LLC in another state
When you register a new LLC, each member transfers their membership interest and percent share from the former LLC to the new LLC.
Merge the LLC
Moving a Corporation
- Continue Former Corporation in the old state. Register as a Foreign Corporation in another state. This will cause a lot of paperwork, and you will have to pay fees in both states. You must also pay for duplicate annual reports and franchise taxes.
- Close your corporation in the former state. Start a new corporation in another state. This may cause costly taxes, and it may have effects on employee benefits like retirement plans. It requires a filing with the old state and paying any outstanding taxes and dissolution fees.
- Register a new corporation in another state. Merge Former Corporation into your new corporation. This removes the necessity to pay fees in two states and permits for a tax-free reorganization. For a C corporation, this can be tax-free. There is no tax on the merger of the old corporation into the new corporation.
To move your business from one state to another requires several tasks before the final physical movement to another state happens. It would be best if you planned to manage the range of tasks to move your business to another state with as much ease as possible. A sole proprietorship and partnerships can be easily transferred to another state. A Limited Liability Company (LLC) and a corporation need formal actions for the relocation process.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.