Do I Need a Lawyer to Convert or Domesticate a Colorado Corporation to Florida?

Relocate, Transfer, Convert, or Domesticate a Colorado Corporation to Florida

Updated: June 24, 2024
Reading Time: 10 Minutes

Objectives:

• Domicile a Colorado C or S Corporation to Florida;
• Keep the same EIN and corporate identity; and
• Enjoy tax benefits provided to Florida residents.

Entities:

• Colorado C Corporations
• Colorado S Corporations

Table of Contents

• What is a Domestication, Conversion, or Transfer?
• Can Colorado C or S Corporations Move to Another State?
• Will This Dissolve My Colorado C or S Corporation?
• Do I Need to Get a New EIN After Domesticating My C or S Corporation to Florida?
• How Can FL Patel Law PLLC Help Domesticate a Colorado Corporation to Florida?
• How Long Will It Take for FL Patel Law PLLC to Domesticate a Colorado C or S Corporation?
• How Much Does it Cost to Domesticate a Colorado Corporation to Florida?
• What Are Some of the Dangers of Domesticating a C or S Corporation Without an Attorney’s Assistance?
• Make Your Domestication More Convenient and Secure with FL Patel Law PLLC
• What Are the Benefits of Domesticating a Colorado C or S Corporation to Florida?
• What Tax Implications Can I Expect if I Domesticate a Colorado Corporation to Florida?
• Should I Hire FL Patel Law PLLC to Domesticate My Colorado C or S Corporation?

Moving a business from Colorado to Florida can present many opportunities and benefits for both the corporation and its owners, including our lack of a state income tax. However, this move doesn’t have to mean giving up its corporate identity thanks to a legal process known as domestication.

Trying to domesticate a Colorado corporation requires a great deal of duty and care in order to prevent the company from falling out of compliance, breaking its continuity, or accidentally causing its liquidation. FL Patel Law PLLC has what it takes to prevent these problems and more from ruining your company’s move. After successfully reorganizing over 140 businesses into Florida entities, you can trust us to have the knowledge and expertise needed to successfully manage your corporation’s relocation.

This article will give you a general idea of how our legal team can keep your business’s move safe and on schedule when you hire us to domesticate a Colorado corporation to Florida. It will also explain the dangers and risks that you and your company could be exposed to if you try to tackle a project as significant as this without an attorney’s help, and how working with our firm can save time and money, too.

Don’t underestimate the challenges that can come up when moving a business across state lines. We can help your Colorado C or S corporation navigate each stage of the domestication process with convenience and security in mind.

Domestication is a method that allows an eligible business to change its state of formation. However, both states involved must have laws authorizing this type of move.

This transition is also commonly known as a “conversion” or “transfer” when the company is moved to a new state. These terms can often be used interchangeably.

Domestication provides a great alternative to dissolving your original company and reincorporating all over again without the same corporate identity. The process protects the business’s continuity, which is essential to retaining important relationships, contracts, and licenses after its move. The company’s assets, rights, privileges, and liabilities will also automatically transfer over to the domesticated Florida corporation.

The Colorado Business Corporation Act will be replaced by the Florida Business Corporation Act as your company’s governing law. However, both Acts may apply if your business has a taxable connection or a foreign qualification in Colorado after becoming a Florida entity. Be sure to discuss this with our corporate attorney during your initial consultation.

Yes, you can domesticate a Colorado corporation to Florida according to section 111-101.5 of the Colorado Revised Statutes. Statutory conversion is a similar method that can be used to change a Colorado LLC into a Florida LLC.

Domestication won’t dissolve your entity unless mistakes are made during its relocation. We can help prevent these mistakes and work to ensure that your business’s continuity is uninterrupted when you work with us to domesticate a Colorado corporation to Florida. Some online sources claim dissolution is necessary to relocate a business from one state to another, but this is false.

The Internal Revenue Service (IRS) ultimately decides this based on the circumstances of the company’s move. Working with a law firm can go a long way towards holding onto your company’s original EIN when you domesticate a Colorado corporation to Florida. This is because the C or S corporation’s continuity must not be broken during the move in order to keep its EIN in addition to other factors.

Colorado and Florida each have their own strict set of criteria that must be met to successfully move a business from one state to the other. What follows is only a simple overview of the process we use to domesticate a Colorado corporation to Florida, and should not be treated as instructions or advice for moving your company. For that kind of reliable legal guidance, schedule a time with our corporate attorney now.

Regardless of the states involved, all of our domestication projects start with an initial consultation and a review of the client’s C or S corporation. The information gathered at this stage is used to confirm the business’s eligibility and create a custom plan for its relocation. Without this added level of legal insight, your company will be left vulnerable to many possible dangers during its move to Florida.

The dedicated support that our clients receive from us when we domesticate a Colorado corporation to Florida includes:

• Drafting all documents required to domesticate a Colorado corporation to Florida, including the Plan of Domestication;
• Ensuring compliance with the laws, regulations, and other legal requirements present in both Colorado and Florida;
• Handling all filings and correspondence with Colorado and Florida state agencies;
• Updating the C or S corporation’s bylaws and other corporate documents to reflect its domestication to Florida; and
• A comprehensive consultation at the end of the project where our corporate lawyer will answer any questions you have left about your company’s relocation.

Our wealth of experience allows us to domesticate a Colorado corporation to Florida on the fastest timeline possible without sacrificing the move’s security. In most cases, this works out to about two or three months, but larger companies with more significant assets may take longer to relocate. Attempting to domesticate a Colorado corporation on your own can also slow down your company’s move for multiple reasons ranging from inexperience to potential mistakes and more.

State agencies in Colorado and Florida will each need several weeks of processing time. These agencies will sometimes face delays of their own due to short staffing, backlogs, and other issues. This means that a lot of time can be wasted if you need to make any corrections to your paperwork. With an attorney managing your company’s move, however, you don’t need to worry that your mistakes or omissions will lead to rejected filings.

Colorado’s fee to domesticate a Colorado corporation is $50.00 and Florida’s is $128.75, which comes to a total of $178.75 just to get your paperwork processed. If you have to correct any mistakes or missing information, then you’ll need to pay those fees all over again, too. However, that could be the least of your concerns considering the fines and penalties your company could face if those errors force it out of compliance or break its continuity.

FL Patel Law PLLC’s clients benefit from flat fees when they work with us to relocate their companies to Florida. We base our fees on the specific needs of the client’s move, which can make budgeting easier and prevent unexpected expenses when you domesticate a Colorado corporation to Florida. Schedule a consultation with Attorney Patel now to get a quote for your C or S corporation’s relocation.

The level of skill and legal acumen required to successfully domesticate a Colorado corporation to Florida means that you and your company will be exposed to many risks if you attempt this transition alone. Legal guidance is the best way to ensure that your company has a successful relocation from Colorado to Florida free from delays, fines, or other problems.

Some of the risks that you face trying to domesticate a Colorado corporation to Florida without an attorney’s assistance include:

• Noncompliance with state laws
• Revocation of the Colorado C or S corporation’s operating authority
• Damaged credit standing
• Damaged relationships with clients and vendors
• Disrupted contracts
• Loss of continuity
• Piercing the corporate veil
• Loss of liability protections
• Tax implications and increased tax liabilities
• Legal disputes
• Dissolution or liquidation
• Missed opportunities
• Expensive fines
• Painful delays
• Taxes on Appreciated Assets – The gained value of your company’s appreciated assets could pass on to its shareholders if you make a mistake when domesticating it to Florida. In other words, if something that was valued at $500,000 when the business was incorporated is now valued at $5,000,000, then you and your fellow business owners could be responsible for that increase.
• Title of Asset Problems – Without us around to make sure that everything is done correctly, then your company’s asset titles might not automatically transfer over to your Florida entity. If that happens, it can be difficult or even impossible to prove that your C or S corporation owns those assets. In addition to other problems, this can be a major roadblock if you ever try to sell your business.

Be aware that, despite its length, the preceding list doesn’t account for everything that can go wrong if you try to domesticate a Colorado corporation to Florida without an attorney’s oversight.

FL Patel Law PLLC has helped bring over 140 companies to Florida with their corporate identities intact. A track record of this caliber means that we know how to domesticate a Colorado corporation to Florida securely, efficiently, and with everyone’s interests protected at every stage of the project.

All of the effort and energy that has been placed into your business so far could be lost if your company’s domestication is unsuccessful. Working with us to domesticate a Colorado corporation isn’t just a massive convenience – it’s foundational to securing your corporation’s future, too.

1. Your company won’t need to file with the State of Colorado ever again if it no longer has a nexus (taxable connection) in that state after its domestication.

2. Moving your C or S corporation to Florida allows you to network with Florida professional accountants, attorneys, and other service providers that are essential to your business’s future growth and success.

3. Hiring our firm to domesticate a Colorado corporation to Florida helps guarantee a smooth, uninterrupted transition from state to state.

4. Our firm will draft Florida Articles of Incorporation that will automatically replace your business’s original incorporation documents. This allows the corporation to keep the same corporate powers, rights, benefits, exemptions, privileges, and principles.

5. Another benefit of hiring our firm to domesticate a Colorado corporation to Florida is that we can ensure that the value of the company’s stock and the amount of stock issued to each shareholder will not be changed during its relocation. Real estate, property rights, liabilities, and lawsuits will automatically transfer to the domesticated corporation. The Florida corporation’s name may be substituted in place of the Colorado entity’s name for any pending legal procedures or actions.

6. The corporation’s shareholders and directors do not need to live in Florida after domesticating their entity.

7. Because your domesticated corporation doesn’t need to have a nexus or taxable connection in Colorado, your company can pay less on state income taxes and/or other taxes that the company was previously responsible for. Talk to your tax professional about this, as the tax implications will be different for each business.

8. Domestication only changes your business’s formation state, which allows it to keep using the same EIN to report and satisfy its tax responsibilities.

9. Our firm can help ensure that your domesticated company can keep using the same bank accounts, the same taxpayer ID, the same operations, and the same contracts that it did back when it was still a Colorado corporation.

Moving your business to a new state is likely going to result in tax implications. The specifics will vary from business to business, and because we can only offer general guidance in this area, consulting with your tax professional is necessary to properly prepare for these changes. Some possible things to talk to them about include:

• State Income Tax: Florida has no state income tax, unlike Colorado. While federal responsibilities remain, this is one way that your company can possibly save money by relocating to Florida.

• Franchise Tax: Florida has no franchise tax for corporations, so there’s no need to worry about that being an added expense when you domesticate a Colorado corporation to Florida.

• Nexus: A nexus is a company’s taxable connection to a specific state. Colorado tax laws may still apply to your business even after it domesticates to Florida if it still has a nexus there after its relocation. Nexus is generally established when a company has a physical presence, employees, or substantial activities in a particular state.

Our domestication projects are finalized with a comprehensive consultation that allows our clients to ask Attorney Patel any questions that they still have about their company’s relocation. They are also provided with a post-domestication checklist with instructions to help them adapt to their new responsibilities as Florida business owners.

Attorney Patel’s history as both a lawyer and an entrepreneur gives him a level of insight that can be particularly useful to business owners new to Florida. Keep in mind that, as a corporate law firm, we provide a range of services tailored towards making life easier for our corporate clients.

Protecting your interests during your company’s move is a critical part of domesticating a company to a new state. Hiring us to domesticate a Colorado corporation to Florida means that you can move forward with confidence, security, and more time to focus on what matters most: actually running your business. Schedule now to get started.

Spare yourself the stress of managing your company’s transition by trusting our firm to domesticate your Colorado C or S corporation to Florida. Don’t risk your corporation’s continuity — get assistance from an experienced corporate domestication attorney by calling (727) 279-5037 or by scheduling your consultation with us online.

Image by Enrique Ramos Lopez from Getty Images Signature courtesy of Canva Pro.