If you are seeking the answer to “What is the best way to move your LLC from one state to another?” LLC domestication is not the only way. There are some alternative ways to move your LLC to another state other than domestication. Keep reading to learn more.
Nothing stays the same permanently, and this includes your business as well. It is very likely that you form an LLC in one state but sometimes later you decide to move your business to a different state.
What should you do to transfer your LLC then? Well, you have several options other than LLC domestication.
Things to Consider While Moving Your LLC to Another State
So you have decided to move your business to another state. It is exciting to explore new markets and take advantage of the business-friendly policies of different states. However, before you make the move, there are a few things you need to know.
Essentially, you should be clear about your business operation and the purpose of transferring your LLC to another state. Consider the following points before relocating your LLC:
- You plan to transfer your LLC permanently: Consider LLC domestication
- You want to keep the old LLC and plan to move temporarily: Register your LLC in the new state as a foreign LLC.
- You wish to move permanently but the new state does not allow LLC domestication: In such a situation, dissolve the old LLC and create a new LLC in the state where you want to relocate your LLC.
- The new state does not allow LLC domestication but you want to keep your previous business operation: Consider merging your LLC in the previous state with the new LLC
- Want to operate your business in multiple states: Form an LLC in your home state and register your LLC in other states as a foreign LLC.
How to Transfer or Move an LLC to Another State
(Including LLC Domestication Alternatives)
So you’ve built up your successful LLC in one state, but now you see a great business opportunity in another state. Many LLC owners want to take advantage of lower LLC taxes or more favorable business climates of other states.
So, what to do to move your business to another state? Well, all the states support your dream of expanding your business operation into new markets.
Transferring your LLC from one state to another is simple and can be done in multiple ways. There are mainly 4 ways to move your LLC to another state:
- LLC domestication
- Operating as a Foreign LLC
- Dissolving the Old LLC and Forming New LLC
- Merging the New LLC With the Old LLC
Most of you know LLC domestication, but a very few know other 3 alternatives.
All you need to do is to make sure that all your bases are covered in terms of legal paperwork and compliance.
The following are the ways to move your LLC from one state to another including the alternatives of LLC domestication process.
LLC Domestication Process
LLC domestication process is defined as: A legal process of changing the LLC’s domicile.
You move your LLC’s charter from one state to another through LLC domestication after changing your state of residence.
In other words, LLC domestication allows your LLC to change the governing laws of your LLC.
Since your business will only be located in one state after LLC domestication, you won’t have to worry about double filings and meeting the LLC requirements of both states.
Want to Domesticate your LLC? Learn How to Domesticate an LLC in any State.
Tip of the Day: To learn how to domesticate an LLC in any state click on our DIY guide. However, hiring a reliable LLC domestication service saves you from a lot of hassle and time wasting:
Please remember only a few states allow LLC domestication. So, you have to go for the alternatives of LLC domestication.
LLC domesticating offers several benefits while moving your LLC to another state which makes it the best way of transferring your business to another state. Here are some of the advantages of LLC domestication:
- It allows you to maintain previous business relationships
- No need to renew contracts made in the previous state
- No need to change bank accounts and credit rating
- You can retain your tax ID number (also known as EIN).
- No need to rehire employees
- No need to transfer assets
Operating as a Foreign LLC
Foreign LLC or out-of-state LLC is the most expensive way of moving an LLC to a different state. However, it is a good option if you want to transfer your business transiently or you want to keep your LLC operational in both states.
In this method of moving your LLC to another state, business owners operate their LLC in the state of new residence as Foreign LLC. The LLC in the previous state remains active and operational.
Want to Operate as Foreign LLC? Learn How to Register a Foreign LLC in any State.
Tip of the Day: To learn how to register a foreign LLC in any state click on our DIY guide. However, hiring a reliable LLC creation service saves you from a lot of hassle and time wasting:
Foreign LLCs are mainly governed by the state’s laws where you have registered your LLC. But, it does not mean new state laws will not apply. Foreign LLCs have to comply with:
- The law of the LLC registration state and fulfill annual requirements
- The state laws where an LLC operates as a foreign LLC and pay state taxes, franchise taxes, etc.
Complying with both state laws significantly increases the annual cost because you have to pay LLC taxes and LLC annual fees in both states. Moreover, it adds considerable hassle to filling LLC annual reports and other LLC maintenance paperwork in both states.
Dissolving the Old LLC and Forming New LLC
As discussed earlier that there are some states that do not allow LLC Domestication, what to do in that situation?
A handy alternative to LLC domestication is to form a new LLC in the state of the new residence and formally dissolve the LLC where it is currently registered. Your LLC will be governed by the state laws where you newly registered your LLC.
It is a good choice to move your LLC to another state as you do not have to pay LLC taxes and annual fees in both states. In addition, you do not have to comply with the filing requirements of both states.
Want to Dissolve an LLC and Form a New LLC? Learn How to Register a New LLC and Terminate the Old LLC.
Tip of the Day: To learn how to register a new LLC or dissolve the previous LLC in any state click on our DIY guide. However, hiring a reliable LLC creation service saves you from a lot of hassle and time wasting:
While dissolving the previous LLC and forming the new one, you need to consider LLC formation Cost and LLC dissolution cost, and other operational costs. Moreover, relocating your business through this method, you need to:- Obtain a new EIN unless the LLC is treated as a disregarded entity
- Re-hire employees
- Open new bank accounts
- Renew business contracts
- Transfer assets
Merging the New LLC With the Old LLC
A statutory LLC merger is the closest equivalence to a statutory LLC domestication. This method is the best way to transfer an LLC to states that do not allow LLC domestication.
Primarily, this method is used to merge two businesses regardless of the location. However, you can move your business from one state to another using this method. You simply need to form a new LLC in the state you have moved to and combine the old LLC with it.
Merging the new LLC with the old LLC is done using a statutory merger. So, you have to file articles of merger to the respective state authority usually the secretary of the state including the terms and conditions of the merger.
Filing the articles of merger effectively dissolves the old LLC that merges into the new LLC. Hence, it is very cost-effective as you do not have to pay annual and maintenance fees in both states.
Moreover, you can use the previous business accounts and EIN, so this further saves your money. This option offers the following advantages:
- No need to obtain new business account
- Previous business contracts are still valid
- No need to re-hire employees
- No need to transfer assets
- No need to file a new EIN
What are the Best States to Move Your LLC in?
Your relocation is not the only reason for LLC domestication or moving an LLC to a different state. Sometimes you want to transfer your LLC due to the state taxes, or sometimes operational costs compel you to move your LLC from one state to another state, and the list goes on.
Since different states have different perks for business owners, you may find some states better to move your LLC than others.
Generally, business owners rate the following states as the best states to move their business to:
States Without a State Income Tax
The following states do not impose any state tax; hence you only need to pay the Federal Income tax. It means you can have a greater share of the money you earn. Here is the list of states that do not have any state income tax:
- Alaska
- Florida
- Nevada
- South Dakota
- Texas
- Washington
- Wyoming
The following states also do not impose a state tax on wages. However, they impose taxes on interest and investments.
- New Hampshire
- Tennessee
States Without a State Sales Tax
The following states do not impose sales taxes that make purchases less expensive within the state. Hence, it reduces the overall operational expenses.
- Alaska
- Delaware
- Montana
- New Hampshire
- Oregon
FAQs on How to Transfer an LLC to Another State
Can you transfer an LLC to another state?
Yes, using a few simple steps, you can easily transfer your LLC from one state to another state. Here are the 4 methods of moving your LLC from one state to another:
- LLC domestication
- Forming a New LLC and Merging it into the Old LLC
- Operating the LLC as Foreign LLC
- Dissolving the Old LLC and Forming a New LLC
What is an LLC domestication?
An LLC domestication is one of the ways to move your LLC to another state. You can learn more about what is an LLC domestication here.
What are the alternatives of LLC domestication?
There are mainly three alternatives of LLC domestication. In other words, there are three other ways to move your LLC to another state namely:
- Merging an LLC
- Operating am LLC as Foreign LLC
- Dissolving the Old LLC and Forming a New LLC
How to move a single member llc to another state?
Moving a single-member LLC is the same as moving a multi-member LLC. However, you do not require to renew your EIN while moving your LLC to another state if you dissolve the previous LLC and form a new LLC in the state of your new residence.
Is LLC domestication and Merging an LLC the same?
No, although a statutory LLC merger is the closest equivalence to a statutory LLC domestication, they are different in many ways. In LLC domestication, you move an LLC from one state to another and change the domicile of your LLC.
While merging of LLCs can occur in the same states. So, in this method, you can move an LLC to another state by forming a new LLC and merging it with the previous LLC or merging two LLCs of the same state enabling one LLC to operate while the other is automatically dissolved.
Do I need a new EIN if I move my LLC to another state?
Well, it depends on how you move your LLC from one state to another. For instance, If you relocate your LLC via LLC merger or LLC domestication, you do not need a new EIN. The same goes for the foreign LLC. However, if you dissolve a previous LLC and create a new one, you need to obtain a new federal tax ID aka EIN.
How to transfer an LLC from any state to Georgia?
You can move your LLC to Georgia using any of the methods mentioned above except LLC domestication. The state of Georgia does not allow you to domesticate your LLC using articles of domestication. Here is the list of states that do not allow LLC domestication.
Aisha Noreen is an owner of a small business with more than 9 years of experience in the marketing industry. With the wisdom of an old soul, she always seeks innovation and mind-blowing ROI techniques. Her unique approach helped many small businesses thrive and she can surprise you in many ways as well. Believe it or not, her energy, passion, and creativity are contagious enough to transform your business and take it to another level.