If your business entity is formed in one state and you want to transfer it to another state, you may be able to domesticate or redomesticate the entity. These are terms that refer to transferring a legal entity from one state to another state.
This differs from registering a business entity in one state with another state as a foreign entity. With this domestication option, the actual legal existence of the business entity is moved or transferred to the other state and the legal existence is the first state is abandoned or terminated.
This is often needed when a business entity has built up its business history or credit or has other assets that cannot be transferred, such as long-term contracts, staff, etc., and it needs or wants to operate in another state.
You may need to domesticate your legal entity in another state for various reasons. Here are the primary reasons why you may need or want to do so:
- To take advantage of more favorable business conditions: A business entity may choose to domesticate to a state with more favorable business conditions, such as lower taxes or a more business-friendly regulatory environment.
- To be closer to key customers, partners, or suppliers: A business entity may choose to domesticate to a state that is closer to key customers, partners, or suppliers, in order to reduce transportation costs and improve efficiency.
- To access new markets: Domesticating to a new state can allow a business entity to access new markets and potentially expand its customer base.
- To reorganize or restructure the business: A business entity may choose to domesticate as part of a reorganization or restructuring of the business. This could involve merging with another company, splitting off a division, or making other changes to the business’s structure.
- To take advantage of state-specific incentives: Some states offer specific incentives, such as tax credits or other breaks or grants, to businesses that register and operate within their borders. A business entity may choose to domesticate to a state in order to take advantage of these incentives.
Regardless of your motivations, we can help domesticate your business entity.