How to Move Your Business to Another State

To relocate or move your business to another state, you’ll need to undergo a process called business domestication (also known as change of domicile).

What is Domestication?

Domesticating a business involves the moving of an existing business to a new state. Domestication allows the business to retain its original date of incorporation, its existing federal tax identification number, bank accounts, licenses, and lines of credit. In addition, retaining the age of the corporation may be useful when applying for new lines of credit as the business will have a provable history.

31 states (plus Washington DC) support domestication. However, exact rules can vary from state to state. For example, California allows domestication ONLY from states that also allow it. States like Arkansas or New York, that have no provisions for domestication, cannot domesticate to California. States like Arizona and South Carolina only allow corporations to domesticate. Nebraska only allows insurance companies to domesticate.

See a chart of the 31 jurisdictions that allow domestication—and the businesses permitted to domesticate there—at the bottom of this page.

Can Northwest Domesticate My Business?

Yes. We offer Wyoming LLC domestication and Wyoming corporation domestication service.

Why Wyoming? Wyoming is one of the most business-friendly states in the nation with great asset protection and low operating costs. We know the ins and outs of Wyoming domestication and are happy to answer all your questions. Click below to learn more about domesticating in the Equality State!

WYOMING LLC DOMESTICATION         WYOMING CORPORATION DOMESTICATION

Basic Domestication Requirements

While exact rules vary widely state to state, there are a few general requirements that all businesses will need to meet for domestication:

• Your business needs to be eligible to form and operate under the laws of the new state.
• Members and/or Board of Directors must approve a change of domicile for the business.
• The business needs to be up-to-date on annual reports, tax payments, and other obligations, and in good standing in the original state of domicile.
• In addition to fees for dissolution, the organization must pay a domestication fee set forth by the state in which the business wishes to domesticate.
• Your business will need to appoint a registered agent in your new jurisdiction.
• You will also need to notify all important parties of a change in address and contact information, as well as settle all debts to vendors, and local departments and other authorities.

In states that do not allow for domestication, you will have to choose between qualifying your existing company as a foreign entity, or dissolving the business in the original state of registration and forming a new company in your new state.

Advantages of Domestication

While there are alternatives to domestication, oftentimes the process of domesticating a business in its new state is just plain easier and better for the business.

• Continuity: Domestication avoids disrupting business operations. A business that properly domesticates often finds it easier to continue relations with employees, investors, and vendors. There is usually no need to update or assign contracts to a new business entity.

• Finances: Business domestication can help a company avoid the need to open new bank accounts. Because really, who wants to deal with updating all of that information?
• Taxation: Your business continues to be treated the same for tax purposes. It may continue to use its employer identification number (EIN) and file federal taxes as it did before the domestication, which helps to simplify paperwork. Also, domestication may help businesses avoid a hefty tax bill by allowing the business to liquidate its assets when operations in the original state come to a close.

Domestication vs. Foreign Qualification

It’s easy to confuse domestication with foreign qualification. The state where you form your business will consider your business to be “domestic.” Every other state will view your business as “foreign.” Foreign qualification notifies a state that a foreign business is active there. In short, foreign qualification allows a business to operate in multiple states as it expands its operations, whereas domestication is really just about moving your business from one state to another state, and closing up shop in the old state.

Example: Imagine you formed an LLC in Kansas. Your LLC is “domestic” to Kansas. If you expand your business to Indiana, then your LLC would be classified as a “foreign LLC” in Indiana. You would need registered agents in both states. Your Kansas LLC would have to file and pay the fees for both the Kansas annual report and Indiana’s biennial report. And then of course, there’s potential tax liability in both states.

However, if you domesticated your LLC in Indiana, you would no longer have a domestic Kansas LLC—just a domestic Indiana LLC.

Where Can I Domesticate My Business?

The following 31 jurisdictions allow for domestication. We’re fans of domesticating in Wyoming, but no matter where you domesticate your business, you’ll need to appoint a registered agent with a physical office in the state. And we can help. We offer registered agent service in all 50 states (plus DC and Puerto Rico).

And if the state you’re eyeing doesn’t domesticate? You can hire us to register your foreign LLC or corporation.

*California will only domesticate businesses FROM states that have provisions for domestication.