eDiscovery, legal research and legal memo creation - ready to be sent to your counterparty? Get it done in a heartbeat with AI. (Get started for free)
What happens if I move states and have two LLCs, should I dissolve one or keep both?
You do not need to dissolve your existing LLC when moving to a new state.
Instead, you can register it as a "foreign LLC" in the new state.
Registering as a foreign LLC allows you to maintain the original LLC's legal structure, tax status, and business relationships while operating in the new state.
Alternatively, you can "domesticate" your existing LLC by transferring its legal domicile to the new state.
This is a streamlined process compared to dissolving and reforming the LLC.
Keeping both LLCs, the original and the new one in the new state, is a viable option.
This allows you to maintain separate legal entities and potentially take advantage of differences in state laws.
Merging the old LLC into a new LLC formed in the new state is another option.
This consolidates the entities but may require more paperwork and legal fees.
The decision to dissolve the original LLC or keep both often depends on factors like tax implications, liability concerns, and future business plans in the new state.
Some states have strict rules around domesticating or dissolving LLCs, so it's crucial to research the specific laws and procedures in both the old and new states.
Maintaining two separate LLCs can provide operational flexibility, but it also means complying with filing requirements and paying fees in both states.
If you decide to dissolve the original LLC, you'll need to follow the state's dissolution process, which may involve settling debts, distributing assets, and filing final tax returns.
Dissolving an LLC can be more complex than establishing a new one, as you may need to address outstanding liabilities, contracts, and other legal obligations.
Keeping both LLCs active can be beneficial if you plan to maintain operations or assets in the original state, but it requires diligent record-keeping and compliance.
The decision to dissolve or keep both LLCs should be made in consultation with a legal and/or tax professional to ensure you comply with all relevant laws and maximize the benefits for your business.
Factors like the nature of your business, the differences in state laws, and your long-term plans will all play a role in determining the best course of action.
Dissolving an LLC may require you to forgo the existing business name, which could be a consideration if the name is valuable to your brand.
Keeping both LLCs active allows you to potentially take advantage of differences in state tax rates, business-friendly regulations, or other incentives.
The process of transferring an LLC to a new state, whether through domestication or registration as a foreign LLC, can take several weeks or months to complete.
Failing to properly dissolve an LLC or register it as a foreign LLC in the new state can lead to legal and financial complications, such as continued tax obligations or liability concerns.
Some states may have special requirements or restrictions around the transfer of LLCs, so it's essential to research the specific laws and regulations in both the old and new states.
The choice between dissolving one LLC or keeping both may also depend on your future plans, such as whether you intend to maintain operations in both states or eventually consolidate the businesses.
Consulting with a local attorney or accountant who is familiar with the laws and regulations in both the old and new states can be invaluable in navigating the process of moving your LLC.
eDiscovery, legal research and legal memo creation - ready to be sent to your counterparty? Get it done in a heartbeat with AI. (Get started for free)