Sometimes, it becomes necessary for companies to relocate across state lines. There can be many reasons for this decision such as 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 the reason, moving a business from one state to another involves dealing with many crucial tasks for business relocation. 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 a number of tasks before the actual final physical movement takes place. 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 registration process in the new state. 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 with the government.
Limited Liability Companies (LLCs)
When your company is a LLC, it is better to hire an attorney when you want to move your business to another state. It is better to review the choices you have with the guidance of an expert attorney as things can get tricky.
Continue your LLC in the previous state
You do not simply finish 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 complex 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 complex 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
You can register a new LLC in your new location by merging the former LLC into the new one. This way, you can keep your existing EIN because the IRS takes this as a continuation of the former LLC.
Moving a Corporation1. 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/or 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.
3. 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 totally 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 a number of tasks before the final physical movement to another state actually happens. You should plan ahead 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 moved 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 accounting, providing services 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 and critical financial documents in an efficient and secure environment. Complete Controller’s team of US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.