There are several reasons why a business might consider moving to another state, a.k.a. domestication. Before moving, business owners will have to do an analysis on the cost and overall benefits to domesticating the business in another state. The cost of doing business can vary greatly from state to state. Businesses may choose to move to states with lower taxes, cheaper labor costs, and more affordable real estate.
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In addition to cost savings, there are other reasons that may cause a business to move to another state. A business may want to move to a state with a larger pool of skilled workers, such as a state with a strong tech industry or a large university system. Moving closer to customers can improve a business’s ability to provide timely and efficient service. Some states are known for having more business-friendly regulations, which can make it easier and less expensive to operate a business.
Additionally, a business may need to move to another state to expand its operations or take advantage of new opportunities. Sometimes, business owners may choose to move to another state for personal reasons, such as to improve their quality of life or be closer to family.
It’s important to note that domesticating a business in another state can be a complex and expensive process, and there are many factors to consider before making a decision. Domesticating involves the “transfer” of an existing corporation to a new jurisdiction. If you are planning to relocate your business outside of the State within which you are now incorporated, you may want to domesticate. Although you have the option of merely dissolving the existing corporation and re-incorporating in your new home state, Domestication may be the more attractive alternative. This is because Domestication allows you to retain the “age” of the corporation, which may be important if you want to keep your existing Federal Tax Identification Number, corporate bank accounts and lines of credit. In addition, retaining the “age” of the corporation may be useful if you are applying for new lines of credit and/or special government exemptions.
It is not necessary for you to have a complete knowledge of the governing laws, rules, policies and/or restrictions relating to each State’s requirements for Domestication. Spiegel & Utrera, P.A. will work with you to make sure your relocation plans move forward expeditiously and your business grows where it needs to grow. Let us know where you would like to go and we will make sure your move is handled properly.