Moving a Business to Another State – How to Transfer an LLC
Have you decided that moving a business to another state is the right thing to do for your company?No matter the reasons behind your decision to move your enterprise, right now you’ll be looking for the best way to go about it.You should know that it can be a challenging period for any business owner, but less so if you properly prepare in advance. This includes both the legal aspect of it, as well as transferring offices interstate. Not only will you have to relocate your firm, but it will also be challenging to ship your belongings to another state. And hopefully, you’ll find the following tips helpful.
Keep Your Firm and Register Another One at Your New Location
If you are unsure about relocating your firm, one of the viable options for you would be to keep your old entity and start another one in a different state. Maybe you are planning on transferring back to your original location, or perhaps you’re relocating only temporarily. But keep in mind that this option will be the most costly one. This is because you will need to keep a registered agent in both states. This also means that you will have to comply with the LLC filing and reporting requirements in each state. Depending on which states we are talking about, you may also need to pay additional taxes.
Steps to Consider If You’re Moving a Business to Another State
Instead of keeping your firm running, you can transfer it to another state. This process is also known as domestication. Depending on whether or not your old and your future state allow it, you will be able to domesticate your business, which is often the easiest way to move your enterprise. It is usually the most efficient way to handle everything, as you will get to keep the accounts, credit rating, and the ID number of your current firm. And you avoid going through all the steps of dissolving your old and starting up another one.
Moving a Firm Is More Affordable Than Keeping Your Old One Too
If you decide to keep your current entity and start another LLC, you will have to cover the costs of both. This means paying for the taxes, annual reports and other fees for both businesses. Transferring your LLC can be an easy process, and it will be much more affordable than keeping two companies running at the same time.
Dissolve Your Old Business and Form a New LLC
Depending on your situation, this could prove to be the most viable option to make transferring your business easier for you and your employees. It includes dissolving your current firm and starting up a different one in your future location. There are a few different ways to go about it, and you can choose the one which suits you the most. You can close your old company and start a different one, or you can go through the process of merging them into one entity.
Research the Appropriate Steps to Dissolve Your Old Business
You have to keep in mind that you can’t simply abandon your current LLC. There are various steps that have to be taken, and they depend on the specific state. Maybe you will have to get the approval of other partners, get a tax clearance certificate, etc. We strongly recommend that you get advice on this topic from an attorney in your local area that is familiar with dissolving an LLC.
Form a Company in Your Future State
Remember to start the next company before you close your current entity. You’ll want to transfer all of the liabilities, accounts, and assets to your newly-founded company before you officially dissolve your previous firm.
Get a New Business License
Keep in mind that licensing and laws vary from one state to another, so your old license may not be valid in your new location. So consult an attorney if you’re not sure how to go about getting a license, or how to find out if you’ll have to do it at all.
Get a New FEIN for Your LLC
One of the downsides of starting a new LLC is that you’ll have to obtain a new Federal Employed Identification Number (FEIN), establish new bank accounts, and get a new tax ID number. Another important piece of advice is to notify the IRS.
Other Tips Related to Transferring a Business You May Find Useful
Remember to go through the rules and laws related to transferring a business interstate before you make any important decisions. This applies to everything from taxes and fees to all the requirements for transferring an LLC. And this applies to both the state you’re transferring from and the one you’re transferring to. You may have to register your company in a different manner, and perhaps you’ll need to pay different income tax rates.
Organize an office move in advance to avoid any mistakes and problems that may arise. This includes everything from handling the entire packing process to making sure that your items are safely shipped. You need to start getting in touch with different relocation companies long before the relocation day comes around. You can check how much the various packing and moving services would cost you and get yourself a moving estimate. And in case you are moving away from your family because of a job, you’ll need to find ways to keep in touch and establish a routine.