Q: I have an corporation in Florida. I would like to know if it would be worth it to move the company to New York?
Thank you to our customer from Florida for that great question! You’ll probably want to consult a business attorney to figure out if moving your corporation to New York is a good idea. However, if you decide you do want to move your business to the Big Apple, we can explain how to do it. In many states, corporations formed elsewhere in the country can change their legal domicile (home state or jurisdiction) through a process called domestication. However, New York is one of 29 states that doesn’t allow for domestication. That doesn’t mean it’s impossible for an out-of-state corporation to do business in New York or move there. It just requires a different approach. Read on to learn how:
Option 1: Dissolve your corporation and reincorporate in New York
If you intend to operate in New York and want the state to be your corporation’s legal domicile, the only way to accomplish this is by dissolving the company in its original state, then reincorporating in New York. This a complex and expensive undertaking, so it’s not to be entered into lightly.
How do I dissolve my corporation in its home state?
To formally dissolve a corporation, you’ll need to make the change with your Secretary of State. In most jurisdictions, dissolving a business requires filing Articles of Dissolution and paying a fee. Additionally, you will need to resolve debts with your company’s creditors, notify the IRS of the company’s dissolution, pay your outstanding taxes, liquidate assets, and make final distributions to shareholders as determined in your corporate bylaws. When your corporation re-forms in New York, you will likely have to reacquire those assets under contract.
How do I reincorporate in New York?
Once you have dissolved your corporation in its original state, you are free to incorporate in New York like any other domestic company. You’ll need to appoint a New York registered agent, submit a Certificate of Incorporation, get a new EIN for your business, draft New York corporate bylaws, and open a new business bank account.
To learn more, check out our New York Incorporation guide.
Option 2: Merge with a New York domestic company
Another unconventional option to get domestic status in the Empire State is by merging with a New York corporation or other business entity to form a new domestic corporation under the terms of Sections 901 and 904-a of the Business Corporation Law and the merger laws of your original state. By merging, the assets, properties and debts of the preexisting corporations become those of the new corporation—meaning you can avoid dissolution filings or having to contractually transfer assets of a dissolved corporation.
Can I incorporate in New York and merge with my old corporation?
Yes, you legally can incorporate in New York and use that corporation as the basis of a merger with your original corporation. There is no requirement to negotiate a merger with a corporation you have no stake in, unless such an arrangement is beneficial to both corporations.
Option 3: Register as a NY foreign corporation
Another means to bring your business to New York is to register it as a foreign corporation while continuing to maintain your original state as its legal domicile.
What is foreign registration?
In business, a company operating in a jurisdiction other than the one where it was formed is considered a “foreign” company—whether it is from another country or just another US state. New York requires any foreign companies to register with the Department of State before doing business in the state.
How do I get my business registered as a New York foreign corporation?
To become a New York foreign corporation, you must file a Application for Authority with the Department of State – Division of Corporations. You will also need to attach a Certificate of Good Standing issued by your original state within the past year. In addition, your company is required to designate a New York registered agent.
For further information, see our guide on New York Foreign Registration.
Option 4: Domesticate your corporation in a neighboring state
While New York itself does not allow for domestication, if you’re moving across the country and no longer wish to keep the state you’re moving from as your corporation’s legal domicile, you do have the option to domesticate your corporation in a nearby state. Massachusetts, New Jersey, and Pennsylvania are all states bordering New York that allow for domestication. And Delaware, a famously business-friendly state, is a short train ride away. However, you may not even need a physical location, as you can incorporate in many states through a registered agent service without a formal physical address.
Is there a downside to domestication in another state?
If you domesticate your corporation in a different state, it will not be domestic to New York, so you will still need to register as a foreign corporation if you intend to conduct business in New York.