Domesticating an LLC requires filing a document, called an articles of domestication, with the state business entity registration agency in the new state. An LLC must create a plan of domestication as part of filing an articles of domestication. While state requirements vary, a plan of domestication generally includes the new LLC jurisdiction, any changes to the LLC's articles of organization, and the way in which ownership interest in the existing LLC will be converted to ownership interest in the domesticated LLC.
The major advantage to domesticating an existing LLC over dissolving it and organizing a new LLC in the new state is the ability to maintain existing business relationships. Domesticating an existing LLC means that it is not necessary to renegotiate and amend every existing contract. Furthermore, an LLC can maintain its age and credit history by domesticating, which makes obtaining loans and lines of credit from financial institutions easier. Without the existing credit history, a new LLC may find it more difficult to obtain a loan or line of credit.
Filing an Articles of Domestication
Typically, an articles of domestication is filed with the state business entity registration agency. While state forms vary, the organizer of a domesticated LLC must provide the name and jurisdiction of the existing LLC, as well as the registered agent for the existing LLC. Some states require a domesticating LLC to include an articles of organization for the new jurisdiction and a certificate of good standing. While filing fees vary by state, they may range anywhere from $30 to $150.
After successfully filing an articles of domestication, an LLC must register as a foreign LLC in the state where it was originally organized if it wishes to continue conducting business operations in that state. Additionally, the domesticated LLC must register with the state tax collection agency and pay sales tax in the new state if it is engaged in providing services or retail sales. The domesticated LLC must also file Form 8832 with the IRS, and indicate that it has been domesticated.