Is it Possible to Domesticate or Convert a Pennsylvania LLC to a Florida LLC?

Relocating, Domiciling, Transferring, or Converting a Pennsylvania LLC to a Florida LLC

Updated: July 22, 2023
Reading Time: 10 Minutes

Objectives:

• Domicile a Pennsylvania Limited Liability Company (LLC) to Florida;
• Maintain the same EIN and identity of the LLC; and
• Enjoy tax benefits provided to Florida residents.

Entities:

• Pennsylvania Limited Liability Companies (LLCs)

Table of Contents

• What is a Conversion or Domestication?
• Does Pennsylvania Allow LLCs to Move Out of State?
• Is My Pennsylvania Entity Dissolved?
• Do I Need To Get a New EIN if I Domesticate My Company to Florida?
• How Does FL Patel Law PLLC Convert My Pennsylvania LLC to a Florida LLC?
• How Long Does It Take To Complete a Domestication or Conversion to the State of Florida?
• What Are the Costs Involved in Domesticating My Pennsylvania LLC to the State of Florida?
• What Are Some of the Risks Associated With a Conversion Gone Wrong?
• Increase Your Chances of a Successful Conversion
• What Are the Benefits of Converting My Pennsylvania LLC to a Florida LLC?
• What Are the Tax Implications of Converting My Pennsylvania LLC to a Florida LLC?
• Should I Work With Attorney Patel to Convert My Pennsylvania LLC to a Florida LLC?

Believe it or not, Florida’s beautiful weather and lack of a state income tax aren’t the only reasons that businesses are rushing to relocate here. Our state has many pro-business policies on the books and a culture that strongly supports entrepreneurs, too. In fact, some even find that their relocation saves them money. If you’re interested in making this type of move, it’s possible through a corporate transaction called statutory conversion.

Converting a Pennsylvania LLC to a Florida LLC can be a great challenge that can go wrong in numerous ways if you’ve never managed this type of transition before. However, FL Patel Law’s years of experience and insight can be an invaluable asset for LLC owners that want to convert their businesses into Florida entities. Our firm has successfully reorganized over 140 businesses into Florida entities, providing us with the necessary skills to prepare them for success in their new state.

This page is to help familiarize our audience with our process for relocating a company to a new state, such as when we convert a Pennsylvania LLC into a Florida LLC, and how that process can keep your company safe while also saving you time and money in the long run. It will also have some urgent warnings about the risks that this transition poses to LLC owners who attempt it without an attorney’s guidance.

Unless every step of your conversion is handled perfectly, there’s no guarantee of your project’s success. In fact, some mistakes could even cause your business to be liquidated. Our legal team knows how to get everything necessary to convert your Pennsylvania LLC into a Florida LLC right on the first try, which is essential to preventing delays and other complications.

Statutory conversion is a method available in some states that allows LLCs to change their state of formation.

This process is often referred to as “domestication,” “conversion,” or “transfer” when the entity is converting to a different state. These terms can often be used interchangeably.

Converting a company allows it to protect its continuity and corporate identity when moving to a new state. Not only does this allow you to continue benefiting from all the work invested into the business so far, it also helps the company maintain important relationships, contracts, and licenses even after converting.

The Florida Revised Limited Liability Company Act will become your company’s new regulating law after it is converted from a Pennsylvania LLC to a Florida LLC. However, if it still has a nexus or a foreign qualification in Pennsylvania after moving to Florida, then both Florida’s laws and Pennsylvania’s Uniform LLC Act could both apply to your converted entity. Talk to our attorney about this during your consultation – schedule yours now.

Pennsylvania allows LLCs to convert to states that also have laws authorizing statutory conversions such as Florida. For more, see Section 351(a)(3) of the Pennsylvania Consolidated Statutes. Corporations formed in Pennsylvania can also change their formation states to Florida by using a similar procedure known as corporate domestication.

Your company won’t be dissolved during its statutory conversion unless mistakes are made during the process. Working with an experienced law firm to convert your Pennsylvania LLC to a Florida LLC can help prevent this. Ignore any advice or instructions you find online stating that dissolution is a part of the domestication or conversion process, too, as this is misleading. Dissolution is only useful when it’s time to liquidate the LLC.

This will depend on the specific circumstances of your company’s move. The Internal Revenue Service (IRS) generally allows converting entities to continue using the EIN that they were issued in their original formation state so long as certain conditions are met. Perhaps the most important of these conditions is that the converted entity must have the same identity that it had before transitioning – only its domicile can change. The business’s continuity must not be broken, either.

We tailor our approach based on the needs of our clients and factors specific to their relocations. However, there are some steps that all of our domestication and conversion projects share. Please note that what follows should not be treated as instructions for converting a Pennsylvania LLC to a Florida LLC – it is only a brief overview of our methodology. For that level of guidance, you’ll need to schedule a time with our attorney.

We first review the client’s LLC to gather as much information as possible about their business and their reasons for moving to Florida. This confirms that their company qualifies under the relevant conversion statutes and serves as the foundation of our strategy for making that move into a reality. It’s also an important part of preventing problems before they can threaten the business or its transition.

When we convert an entity from out of state to Florida, our clients benefit from extensive support that includes:

• Drafting the Plan of Conversion and other required documents
• Ensuring compliance with the laws and other legal requirements in both states
• Filing the necessary documents with Pennsylvania and Florida state agencies
• Updating the LLC’s operating agreement and other corporate documents to reflect its conversion from a Pennsylvania LLC to a Florida LLC
• A comprehensive consultation to address final concerns and questions

Our firm has developed a highly effective and efficient process that can relocate most companies to Florida in about two or three months. This is the fastest possible turnaround because state agencies in both Pennsylvania and Florida will each need several weeks of processing time. These agencies are also sometimes slowed down by backlogs, short staffing, and other issues, too, so there’s not much margin of error here if you want to stay on schedule.

Because of our firm’s wealth of experience handling conversions and domestications, you won’t need to sacrifice the security of your business’s transition in the name of efficiency if you hire us to convert your Pennsylvania LLC to a Florida LLC. We’ve refined our internal processes across dozens of these transactions, giving us the insight needed to give your LLC the safest and most convenient move possible without delays.

Every state gets to decide on its own filing fee for domestications, conversions, and other kinds of entity reorganizations. Florida charges $155.00 to process LLC conversions and Pennsylvania charges $70.00, so your filing fees alone will set you back by at least $225.00 when converting a Pennsylvania LLC to a Florida LLC. Mistakes can drive this cost even higher, too.

FL Patel Law PLLC’s conversion and domestication clients enjoy flat fees for their projects based on the specific needs of their company’s relocation. Schedule an initial consultation with us now to get a quote for converting your Pennsylvania LLC to a Florida LLC.

Because of the strict requirements and multiple jurisdictions involved in this transition, both you and your company can be exposed to almost countless risks if you don’t reach out for legal guidance before converting a Pennsylvania LLC to a Florida LLC. An attorney’s professionalism and unique skills make them an unparalleled resource for presenting delays, expensive mistakes, and other problems from threatening your interests.

Converting a Pennsylvania LLC to a Florida LLC, or moving any other business entity across state lines for that matter, can lead to the following problems if you insist on moving forward alone:

• Noncompliance with state laws
• Revocation of the LLC’s operating authority
• Damaged credit standing
• Damaged relationships with clients and vendors
• Disrupted contracts
• Loss of business continuity
• Loss of limited liability protection
• Tax implications and increased tax liabilities
• Legal disputes
• Dissolution or liquidation
• Missed opportunities
• Expensive fines
• Painful delays
• Taxes on Appreciated Assets – Depending on the LLC’s tax structure, its members could end up paying income taxes on appreciated assets if they make any errors during the conversion process. For instance, if an asset that was worth $100,000 at the company’s founding is now worth $1 million, and the company is mistakenly dissolved or liquidated, then the members could be taxed on the gained value.
• Title of Asset Issues – Another benefit of converting a Pennsylvania LLC to a Florida LLC is that asset titles will automatically transfer over to the domesticated entity – that is, assuming the conversion process was handled correctly. This can make it difficult to prove ownership of those assets, which can cause major headaches when trying to sell a company, among other problems.

Please note that this list is not exhaustive. The dangers of undertaking a conversion without a lawyer to advise you through it should not be underestimated.

With over 140 business conversions and domestications to our credit, our firm’s proven track record means that you can rest easier knowing that your interests are in safe hands when we’re the ones in charge of converting your Pennsylvania LLC to a Florida LLC.

Like any deal that would take your business across state lines, a project as serious as converting a Pennsylvania LLC to a Florida LLC deserves the added security of an attorney’s oversight. Hiring a firm as experienced as ours is the best way to ensure that everything runs smoothly during your company’s move.

1. Converting a Pennsylvania LLC to a Florida LLC can remove its nexus in that state, which means that your company will never need to file with the State of Pennsylvania ever again.

2. Becoming a Florida business owner means that you can team up with Florida professional accountants, attorneys, and other service providers who can help take your operations to the next level.

3. Your company’s relocation from Pennsylvania to Florida will be free from interruptions and delays with us in charge of its conversion.

4. Because we ensure that Florida Articles of Organization will seamlessly replace the LLC’s original Pennsylvania formation documents, the converted LLC can keep all of the powers, rights, benefits, exemptions, privileges, and principles that it enjoyed in its previous state.

5. Membership interest – both its value and the amount held by each member – will be unaffected when converting a Pennsylvania LLC to a Florida LLC. Additionally, the LLC’s real estate and other property rights will automatically transfer to the converted entity. However, this is true for any liabilities and lawsuits, too. Any pending legal procedures or actions will be substituted with the name of the Florida LLC.

6. The LLC’s owners don’t need to live in Florida after converting their Pennsylvania LLC to a Florida LLC.

7. As the proud owner of a newly converted Florida LLC, you won’t need to have a nexus (taxable connection) in Pennsylvania anymore. This can lower what your company pays on state income taxes and/or other taxes that it was subject to in Pennsylvania. Check with your tax professional for more guidance on taxes, as it is unique to each business.

8. Converting a Pennsylvania LLC to a Florida LLC lets you continue using the same EIN in your company’s new state. All the process changes about your company is its formation state – it’s still the same entity that existed before with the same tax reporting requirements.

9. Another convenience of hiring our firm to convert your Pennsylvania LLC to a Florida LLC is that the converted entity can continue using the same bank accounts, the same taxpayer ID, the same operations, and the same contracts that it had in its original state. Careful planning should be undertaken before engaging in domestication or conversion, however, to ensure that this is the case.

Making a transition as big as relocating your company to a new state will likely have some tax implications for both yourself and your LLC. Understanding and preparing for these changes is critical, but because our legal team can only offer generalized advice on these matters, you will need to talk to your tax professional for more information. A few common items to discuss with them are:

• State Income Tax: Converting a Pennsylvania LLC to a Florida LLC could mean that your company never has to worry about state sales tax again. Florida has no income tax at the state level, so if your conversion removes your company’s nexus in Pennsylvania, then the only remaining income tax should be at the federal level.

• Franchise Tax: Another tax applied to your company that you might be able to shake by converting your Pennsylvania LLC to a Florida LLC is franchise tax. We don’t have that one here, either. The LLC will need to close its account with the Pennsylvania Department of Revenue and file final returns if required.

• Nexus: A nexus is a business’s taxable connection to a particular state. If your converted entity still has a nexus in Pennsylvania – usually by having employees, a physical presence, and/or substantial activities in that location – then it will need to follow both Florida and Pennsylvania tax laws even after its move.

Once our legal team has finished converting a client’s business into a Florida entity, Attorney Patel hosts a final consultation so that he can answer any remaining questions or concerns about the project. They are also provided with a post-conversion checklist and instructions that will further help them adapt to their new responsibilities as Florida LLC owners.

Attorney Patel’s years of experience as both an attorney and an entrepreneur himself give him a special kind of insight into business ownership that many of our clients find highly beneficial. Remember that, as a corporate law firm, we offer a suite of services to support our clients that could prove useful, if not necessary, to running a business in Florida.

Without an attorney’s help, there’s no guarantee that your company’s relocation won’t actually end in its accidental liquidation. When you work with us to convert your Pennsylvania LLC to a Florida LLC, you’ll have more time and energy to focus on your business’s needs while we deal with the legal complexities and other hassles of its relocation. Schedule your first consultation with us now.

Are you ready to convert your Pennsylvania LLC to a Florida LLC? Don’t risk breaking your business’s stride — get assistance from an experienced business conversion attorney by calling (727) 279-5037 or by scheduling a time using our online calendar.

Image Source: Pittsburgh Pennsylvania Skyline by 12019 from Pixabay.