Q: I have a California LLC and would like to move it to Kansas. What do I need to do to get this going?
Thank you to a California customer for this great question on how to move their LLC from California to Kansas. The process to move a business from one state to another state is known as domestication. Not all states recognize the process, but luckily Kansas does! Here’s what you need to know about moving your LLC from the Golden State to the Sunflower State.
What is Domestication?
Domestication is the process by which a business, in this case an LLC, moves from the state where it is currently registered, to a new state. The process of domestication allows the LLC to retain its original date of formation, federal tax identification number, bank accounts, federal licenses, and contracts with clients. It’s important not to confuse domestication with foreign qualification, which is the process of expanding your business beyond its state of formation. Foreign qualification allows a business to expand operations to multiple states. Domestication is about closing up a business in one state, and moving that business to a new state.
What are the benefits of domestication?
The main benefit of domesticating your LLC instead of creating a brand new LLC is that the process helps maintain continuity within the business. In this case, your California LLC will continue to operate just as it has, but from Kansas. No need to move employees, transfer licenses, open new bank accounts, or even mess with changing business contracts. Domestication will also ensure that your LLC continues to be treated the same for tax purposes, and more importantly, you won’t have to get a new EIN for the LLC.
Steps to Domesticate Your LLC
1. Create a Plan of Domestication
Your plan of domestication is an official document that formally approves the move. All LLC members must agree on the plan. Even if all LLC members are on board, or even if you are the only member, this process is still relatively formal. In order to be in line with Kan. Stat. § 17-78-502, you’ll want record your plan in the LLC’s operating agreement. All LLC members will also need to sign off Your plan of domestication will need to include information on:
- Name and jurisdiction of LLC before domestication
- Name and jurisdiction of LLC after domestication
- Agreement on how LLC assets will be transferred to the new Kansas LLC
- Agreement that the LLC will abide by all laws in Kansas
From there you’ll need to appoint a Kansas registered agent. A national registered agent service like Northwest, with offices in every state and jurisdiction, can make the processes of finding and appointing a registered agent much easier, especially if you’re already a customer. Just let us know your intent to domesticate your LLC to Kansas, and we can help get the ball rolling.
2. Get a Certificate of Status
Kansas will want to know if your LLC is up to date on all of its state filings, reports, and fees. This means you’ll need to get a California Certificate of Status. Also known as a Certificate of Good Standing or Certificate of Existence, your Certificate of Status helps prove to Kansas that your LLC in California has been well behaved. You can file online or by mail, but online filings only cost $5 and are available immediately. Mail filings will cost you $15, and can take up to a week to arrive.
3. File Kansas Certificate of Domestication
To secure your LLC’s position as an LLC in Kansas, it will need to file paperwork with the Kansas Secretary of State. In accordance with Kan. Stat. § 17-78-505 you’ll be required to file a Certificate of Domestication to Kansas. You’ll also need to include your Certificate of Status with your filing. You can submit the paperwork online, by mail, in person, or by fax. Online, in person, and mail filings cost $75. You can also fax your paperwork but you’ll be charged an added $20 filing fee.
Online filings:
Kansas Business Services Division
Mail and in person:
Secretary of State
Memorial Hall, 1st Floor
120 S.W. 10th Avenue
Topeka, KS 66612-1594
Fax:
(785) 296-4570
Will my LLC be able to keep its name?
That depends. If another business has registered the use of your LLC’s name in Kansas, you’ll need to register a new name on your Certificate of Domestication to Kansas. You can find out if your LLC’s name is in use by searching the Kansas Business Entity Database. It’s probably a good idea to know if your LLC name is available in Kansas before you make the move.
4. Dissolve Your Original LLC
Now that you’ve moved your LLC to Kansas, you’ll want to dissolve your California LLC. There is no fee to dissolve your LLC in California, but the process can take up to eight weeks. California charges a $15 special handling fee for in person submissions of your Certificate of Dissolution. If you are in a hurry to dissolve your LLC, you can pay for expedited processing:
24 hour processing: $350
Same day processing: $750
Dissolving your LLC makes sure that it isn’t still registered in its original jurisdiction, and that you won’t be on the hook for any state fees or reports. While you won’t have to file any paperwork with Kansas to prove that your LLC is dissolved, you will want to keep your approved certificate with your new Kansas LLC records.