What is Domestication and why do I need it?
If you decide to relocate your business from one state to another, you will need to change your company’s domicile for it to stay compliant. This process is called domestication. Domestication allows the company to move to another state without sacrificing continuity of the business, which means your company will retain its original date of incorporation, its existing EIN, business license and other permits, bank accounts, etc. Also, domestication will preserve the age of your corporation or LLC, which could be beneficial if you apply for business loans or new lines of credit as your business will have a provable history.
Domestication Requirements
Not all states allow domestication, so if you made a decision to move your business to a different state, check if that state allows the domestication process. If the state you are moving to does not allow domestication, you will have two options to choose from:
• Register your existing company as a foreign entity
• Dissolve your company in the original state of registration and form a new entity in your new state.
The procedure of domestication varies state by state, however, there are a few general requirements for domestication that apply to every state:
• Your corporation or LLC must be eligible to form and operate under the laws of the new state
• The decision to move the company’s domicile should be approved by Members and/or Board of Directors
• Your corporation or LLC should be in good standing and up-to-date on tax payments, annual reports, and other obligations
• Your corporation or LLC needs to pay all the fees for dissolution in its home state, and a domestication fee established by the state where your business wants to domesticate
• Your corporation or LLC will need to appoint a registered agent in your new jurisdiction
• Your company will be required to notify all concerned parties of a change of address and contact information, and settle all outstanding balances with vendors, suppliers, and local authorities.
How to domesticate your corporation or LLC
Generally, domesticating your business entity requires completing the following three steps:
Step 1. Obtain a certified copy of your Articles of Incorporation and a Certificate of Good Standing
A Certified Copy and a Certificate of Good Standing typically can be ordered online from the state authority that originally approved the formation of your business (in most states, from the Secretary of State office).
Step 2. Fill out and submit the Articles of Domestication form
This form is typically available on the Secretary of State website for the state where you’re domesticating. The application form will ask about general information about your company and your registered agent information for the state of domestication. You may need to include a copy of a resolution with the agreement for the change of domicile. You’ll also need to pay the state’s domestication fee.
Step 3. Dissolve your business in your original state
Finally, you should file for dissolving of your business entity in your original state. We recommend waiting with the formal dissolution application until you receive a confirmation from the new state authorities that your application for a new domicile was filed and approved.
Advantages of Domestication
• Your business gets to keep the same EIN and business structure
• Your company will keep the original date of formation which builds up a business reputation.
Disadvantages of Domestication
• Cost: this processing requires additional costs, which vary by the state
• Complexity of application process.
The US States that allow Domestication
Currently, twenty-seven US states allow domestication in one form or another. Some states will allow domestication only of certain business structures (for example, only corporations). Other states approve domestication of any business structure but only from certain other states. Below is the list of states where domestication is possible in one form or another:
• Arizona
• California
• Colorado
• Delaware
• District of Columbia
• Florida
• Idaho
• Indiana
• Kansas
• Kentucky
• Louisiana
• Massachusetts
• Maine
• Mississippi
• Nebraska
• New Hampshire
• New Jersey
• Nevada
• Pennsylvania
• South Carolina
• South Dakota
• Texas
• Utah
• Virginia
• Washington
• Wisconsin
• Wyoming
Can BizStarter help me with the domestication process?
Yes, we can. BizStarter has been assisting business owners with applications for Domestication, Reinstatement, Certificate of Good Standing, Articles of Incorporation, Apostille and authentication services, and much more since 2016. We can file all the necessary paperwork on behalf of your business for a minimal processing fee. By trusting BizStarter with your business compliance paperwork you will save your money, time, and peace of mind.
Contact us and we will guide you through the domestication process.
