It's important to research any required licenses and permits in the new home state before doing any business there. Stay on top of business license and permit requirements With foreign qualification, the business retains its residence in the state where it initially domesticated. ![]() Foreign qualification involves registering a business in another state (or states) in addition to its home state. ![]() It must then follow the laws, regulations, and compliance requirements of its new home state.ĭon’t confuse redomestication with foreign qualification. Understand that redomestication is different from foreign qualificationĪfter a company completes redomestication, it ceases to exist in its original home state. Each state has its own rules and processes, so it’s crucial that you research any details.ģ. Here is a current list of states which allow out-of-state businesses to domesticate within the state's borders. As you might imagine, that process becomes more complicated (and usually more costly) than filing domestication documents. States that don’t acknowledge redomestication typically require you to dissolve the business in your current home state and register the brand-new business entity in the new home state. Be aware that not all states allow redomesticationĪlthough businesses can leave any state, not all states allow companies to redomesticate to their jurisdictions. If the new state rejects the request, you could be left with no active, legal business entity. It can have devastating consequences if a business dissolves in its original state before the new state has officially approved its domestication filing. ![]() 10 Frequently Asked Questions About LLCsħ things to keep in mind when moving your business 1.25 Frequently Asked Questions on Starting a Business.After receiving approval from the new state, dissolve the business in the state where it was chartered originally.Apply for domestication in the new state by filing Articles of Domestication (or Articles of Continuance), providing a Certificate of Good Standing from the current home state and providing a copy of (completed but not filed) Articles of Dissolution form for the existing home state.Complete (but don’t yet file) the current state’s Articles of Dissolution form.It’s critical to research what’s involved and helpful to enlist the expertise of an attorney and tax advisor before venturing down the path. Generally, business owners will have to follow the following steps: The process of redomesticating may differ depending on the state. The new state will provide access to a more extensive or more diverse workforce.Redomestication will serve the business owner’s family life more effectively (such as access to better schools for their kids, closer to job opportunities for their spouse, or nearer to aging parents, etc.).Other states may have introduced tax incentives that would benefit the business.The domicile state has implemented more regulations on the industry the business is involved in.The domicile state has imposed additional or raised business taxes and fees.Real estate costs (renting, leasing, property taxes, etc.) have risen in the current domicile state and significantly affect profitability.The target market has changed, and better opportunities exist in a different state.
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