LLC Domestication Overview
31 states allow domestication. However, rules vary. For example, California allows domestication ONLY from states that allow it too.
Domesticating your LLC moves your LLC from one state to another while maintaining the LLC’s legal existence, bank accounts, tax ID number, credit rating, and business relationships.
To domesticate an LLC, get a certificate of good standing from the previous state. Submit it with articles of domestication to the new state. Dissolve the business in the former state. The process varies per state.
States Allowing LLC Domestication:
- Arizona
- California
- Kentucky
Reasons to Domesticate an LLC:
- Formed the LLC in a state you don’t live in
- Moving and want to base your business in another state
- Want to maintain business relationships
Foreign LLC Operations
A foreign LLC does business in multiple states. The state where you establish your LLC is the domestic state. Other states where you operate are foreign LLCs.
Key Considerations for LLC Domestication
- You may want to domesticate your LLC if you formed your business in a state that isn’t where you reside, or you’re moving to another state and you want to base your business there and keep business relationships.
- Some states offer LLCs more financial advantages than others. Weigh your options before deciding the best state for your business needs.
LLC Domestication Process
- Determine which state aligns with your specific needs and offers the most favorable environment for your LLC. Consulting a business attorney or accountant is wise.
- If moving your entire business to a new state, often it’s best to close the existing LLC and make a new one in the new state. Steps vary by state.
California LLC Domestication Specifics
31 states allow domestication of LLCs. However, rules vary. California allows domestication ONLY from states with reciprocal provisions.
If formed outside your home state or moving, LLC domestication allows retaining your business in the new state. It preserves relationships.
State-Specific Considerations
- Louisiana does not require tax clearance before dissolving an LLC. Check your own state’s requirements on dissolution.
- Before forming an LLC, have a fixed business and mailing address in each state. Addresses don’t need to be where you establish the LLC.