Taylor Legal Blog

What Do I Do With My Business Entity If I Move to Another State? [VIDEO]

Posted by Katherine L. Taylor, Attorney and CPA, Chief Problem SolverDec 14, 20220 Comments

{4 minutes to read}  Are you a business owner with a personal services business, seeking to move to another state? I'm going to give you three options for your business entity if you move.

For example, let's say you have an LLC that's registered in Maryland. You may be the sole owner or have a partner or member who is also an owner of the LLC, and all of you do business in Maryland. You meet clients there. You might work out of your home, out of an actual office, or business suite-type location. You decide, however, that you want to move to Florida. So, what do you do with that registered Maryland business?

First, you can keep your Maryland LLC as a Maryland LLC, and ask Florida for permission for that LLC to do business in that state. That is probably the easiest and cheapest way to go about accomplishing the goal, which is to make sure that the LLC can do business in Florida. 

This is easiest, but you end up with two state registrations — you have an entity that's registered in one state, but that has also been given permission to do business in another state. You might have reporting obligations in both states, and it can get a little unwieldy.

Another option would be to “domesticate” your LLC from Maryland to Florida. What you're doing is using a statutory scheme that's set up by both Maryland and Florida — both states would need to allow reciprocity. You are saying to Florida — “Hey, Florida, accept my Maryland LLC as a Florida LLC.” The good thing about that is it's fairly easy and the LLC remains, by law, the same entity. It is just sited in a different location, so you can keep the same bank accounts, and many times, keep the same Federal ID number. You don't have to change contracts that you've used for a lot of years.

Let's say you don't want to change from a Maryland LLC to a Florida LLC through the domestication process, which is most likely because there is no such process available. The next option that you can consider is to form a Florida LLC and then dissolve your Maryland LLC. This is much more complex because you must figure out how you're going to transfer the assets from one business to the other, and then you must dissolve the Maryland LLC, which is a more complicated process.

So, as you can see, there are many questions that you need to ask yourself regarding what to do with your business entity if you decide to move, and plan to move the business along with you. If you have any questions, go to our website, www.TaylorLegal.com, where you will find our contact information. You can also go to our You Tube channel, where we have lots of other tips and answers to many difficult questions. 


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