Can an Attorney Domesticate or Convert a Vermont LLC to a Florida LLC?
Relocating, Domiciling, Transferring, or Converting a Vermont LLC to a Florida LLC
Updated: June 24, 2024
Reading Time: 10 Minutes
Objectives:
- Domicile a Vermont Limited Liability Company (LLC) to Florida;
- Maintain the same EIN and identity of the LLC; and
- Enjoy tax benefits provided to Florida residents.
Entities:
- Vermont Limited Liability Companies (LLCs)
Table of Contents
- What is a Conversion or Domestication?
- Does Vermont Allow LLCs to Move Out of State?
- Is My Vermont 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 Vermont 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 Vermont 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 Vermont LLC to a Florida LLC?
- What Are the Tax Implications of Converting My Vermont LLC to a Florida LLC?
- Should I Work With Attorney Patel to Convert My Vermont LLC to a Florida LLC?
Florida’s popularity among business owners and entrepreneurs is no secret, so it isn’t surprising that so many companies are looking to relocate to the Sunshine State in recent years. There are many reasons for doing this, whether it’s to enjoy our world-class beaches or to take advantage of the fact that Florida lacks a state income tax and many of the other taxes issued by states like Vermont. This move can be made using a process called “statutory conversion.”
Without experience or reliable legal guidance, trying to convert a Vermont LLC to a Florida LLC can pose many challenges and outright dangers to both your company and its members. The good news is that FL Patel Law PLLC is equipped with the knowledge and experience necessary to ensure a seamless transition from one state to another. Our firm has successfully reorganized over 140 businesses into Florida entities, providing us with the necessary insight to prepare them for success in their new state.
This page will help you get to know more about the steps we take to protect your business when you hire our firm for your company’s relocation to Florida, as well as how working with us can save you time and money, too. It also has some important warnings about the dangers involved with this type of transition and how working with our attorney can help keep your company safe as it moves across state lines.
The dangers of attempting this project alone range from fines for breaking regulatory compliance to the accidental liquidation of your business. Working with an attorney is the best way to make sure that your company makes it safely to its new home. Keep reading for more about the hazards of trying to convert a Vermont LLC to a Florida LLC on your own.
What is a Conversion or a Domestication?
To topStatutory conversion is a legal process that allows qualifying companies to change their state of formation without altering the rest of their business’s identity.
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 Vermont LLC to a Florida LLC with our firm also protects your company’s continuity, which wouldn’t be the case if you had to dissolve your original business and form a new one in your chosen state. Because of this, your company keeps the same rights, assets, privileges, and liabilities that it had before its conversion. It’s also an important part of keeping the licenses, contracts, and relationships that are vital to your company’s operations.
The regulations of the Florida Revised Limited Company Act will apply to your business after it converts from a Vermont LLC to a Florida LLC. It might need to keep following the rules of the Vermont Limited Liability Company Act, too, if it has a foreign qualification or nexus in its original formation state after its transition into a Florida entity. This is something that you should discuss during your initial consultation with our attorney.
Vermont allows LLCs to move to eligible states by using statutory conversion according to Section 4144 of the Vermont Statutes Annotated (VSA). Vermont C and S corporations can also make this move using a similar process commonly known as domestication.
§ 4144. Approval of conversion
(a) For any conversion of a limited liability company into another type of organization, a plan of conversion is not effective unless it has been approved:
(1) by a domestic converting limited liability company, in accordance with the organizational documents of the limited liability company, or, in the absence of a provision governing approval of conversions, by all the members of the limited liability company entitled to vote on or consent to any matter; and
(2) in a record, by each member of a domestic converting limited liability company who will have personal liability for debts, obligations, and other liabilities that are incurred after the conversion becomes effective, unless:
(A) the operating agreement of the company provides in a record for the approval of a conversion or a merger in which some or all of its members become subject to personal liability by the affirmative vote or consent of fewer than all the members; and
(B) the member voted for or consented in a record to that provision of the operating agreement or became a member after the adoption of that provision.
(b) For a conversion of a domestic general partnership or domestic limited partnership into a domestic limited liability company, the plan of conversion shall be approved by all of the partners or by a number or percentage of the partners required for the conversion in the partnership agreement.
(c) A conversion involving a domestic converting organization is not effective unless it is approved by the domestic converting organization in accordance with its governing law and organizational documents.
(d) A conversion of a foreign converting organization is not effective unless it is approved by the foreign organization in accordance with the law of the foreign organization’s jurisdiction of formation and its organizational documents. (Added 2015, No. 17, § 2.)
Is My Vermont Entity Dissolved?
To topYour Vermont LLC won’t be dissolved when converting into a Florida LLC unless mistakes are made because you attempted this transition without an attorney’s oversight. It isn’t a necessary part of converting your entity, either, despite what some misleading online sources may claim. Dissolution should only be initiated when you’re ready to liquidate the company and end its operations once and for all.
Do I Need To Get a New EIN if I Domesticate My Company to Florida?
To topThe Internal Revenue Service (IRS) will decide if you can keep using the same EIN after converting your Vermont LLC to a Florida LLC based on factors specific to your company’s relocation. Generally, they require that the converting or domesticating entity’s continuity remain uninterrupted during its move, and there can be no changes to its corporate identity other than its new domicile, either. Working with an attorney for your relocation to Florida can help ensure that you can keep using your original EIN after moving your LLC to Florida, as we know how to satisfy the IRS’s requirements.
How Does FL Patel Law PLLC Convert My Vermont LLC to a Florida LLC?
To topWhile every conversion has its own unique requirements, there are some parts of the process that apply regardless of which states are involved. Here, we’ll introduce you to the basics of how our firm can make things more convenient and more secure when converting your Vermont LLC to a Florida LLC. These are not instructions for doing so. For that kind of guidance, you need to schedule a time with our conversion attorney.
First, we confirm that the client’s LLC qualifies for statutory conversion. We also review the client’s business and conduct a thorough initial consultation that gives us the information we need to create a custom plan for converting their Vermont LLC to a Florida LLC with its continuity intact.
Our conversion and domestication services offer many benefits for those looking to convert a Vermont LLC to a Florida LLC, including:
- 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 Vermont and Florida state agencies
- Updating the LLC’s operating agreement and other corporate documents to reflect its conversion from a Vermont LLC to a Florida LLC
- A comprehensive consultation to address final concerns and questions
How Long Does It Take To Complete a Domestication or Conversion to the State of Florida?
To topWorking with our firm allows you to convert your Vermont LLC to a Florida LLC as quickly as possible. For most businesses, this works out to about two or three months, although larger entities might require more time. This efficiency comes from our legal team’s expertise and a process refined across more than 140 relocation projects. We expedite our filings when possible, too.
State agencies in both Vermont and Florida will each need at least several weeks to process your documents. Keep in mind, too, that these agencies sometimes face delays of their own due to backlogs, lack of personnel, and other problems. This means that any mistakes that you make during the conversion process could set your company’s conversion from a Vermont LLC to a Florida LLC back for months, if not longer.
What Are the Costs Involved in Domesticating My Vermont LLC to the State of Florida?
To topVermont’s filing fee for conversion documents is $20.00 which, when combined with Florida’s $155.00, comes to a total of $175.00 just to have your paperwork processed by each state. Keep in mind that mistakes and errors in the conversion process will only drive this cost higher. Working with an attorney is a key part of preventing repeated filing fees, fines for noncompliance, and other unexpected expenses when converting a Vermont LLC to a Florida LLC.
FL Patel Law PLLC’s domestication and conversion services are offered on a flat-fee basis determined by the specific requirements of that company’s relocation. Schedule your initial consultation now to get a quote for converting or domesticating your business into a Florida entity.
What Are Some of the Risks Associated With a Conversion Gone Wrong?
To topBecause of the complexities of the project, there are many different ways for things to go wrong if you try to convert your own Vermont LLC to a Florida LLC. Our legal team’s expertise with these transactions means that we know how to prevent these issues from becoming problems for you or your company in the first place.
Some of the risks of attempting to move your business across state lines without an attorney’s advice and guidance include:
- 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 Vermont 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.
Keep in mind that the above list is not complete, despite its length.
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 Vermont LLC to a Florida LLC.
Increase Your Chances of a Successful Conversion
To topAttempting a project with this many risks and complexities places your business in needless danger. With our firm managing your company’s conversion from a Vermont LLC to a Florida LLC, your company can benefit from the security and convenience that come from our legal team’s collective knowledge and experience.
What Are the Benefits of Converting My Vermont LLC to a Florida LLC?
To top1. Unless your business still has a nexus in its original state, there will be no need to file with the State of Vermont ever again after converting from a Vermont LLC to a Florida LLC.
2. Converting a Vermont LLC to a Florida LLC gives you the opportunity to work with Florida professional accountants, attorneys, and other service providers that know and live Florida LLC and business law.
3. Hiring our firm for your LLC’s conversion helps guarantee a safe and successful relocation from Vermont to Florida without delays or interruptions.
4. Your Vermont LLC’s original formation documents will be seamlessly replaced by Florida Articles of Organization. This means that the LLC retains the same powers, rights, benefits, exemptions, privileges, and principles.
5. Everyone’s membership interest in the LLC will stay the same when you work with us to convert a Vermont LLC to a Florida LLC.
6. The LLC’s members are not required to live in Florida after relocating their company.
7. Your converted entity doesn’t need to have a taxable connection (nexus) in Vermont after moving to Florida.
8. Conversion only changes your LLC’s formation state. This means that it’s the same business that existed in its previous state, just with a new jurisdiction, which allows it to keep using the same EIN after moving.
9. Converting your business into a Florida LLC also means that it can keep using the same bank accounts, the same taxpayer ID, the same operations, and the same contracts, too. Depending on the size and complexity of the business, careful planning should be undertaken before engaging in domestication or conversion.
What Are the Tax Implications of Converting My Vermont LLC to a Florida LLC?
To topIt’s essential to start preparing for the tax implications of your company’s conversion as early as possible. You’ll need your chosen tax professional’s help with this, as our law firm can only provide general guidance in these areas. The specific changes that your business should expect will depend on its own unique circumstances, but a few common things to bring up with your tax professional when converting a Vermont LLC to a Florida LLC include:
- State Income Tax: One of the most commonly cited reasons for moving a business to Florida is the fact that our state doesn’t have its own income tax. Federal responsibilities will still remain, but this is one way that your company could end up paying less in taxes by relocating to the Sunshine State.
- Franchise Tax: Franchise tax is a second tax issued by the State of Vermont but not by the State of Florida. The LLC will need to close its account with the Vermont Department of Taxes and file final returns if required.
- Nexus: Even after it becomes a Florida entity, your LLC might need to keep following Vermont tax laws under certain circumstances, such as if your business still has a nexus there after its move. Nexus is usually established if a company has a physical presence, employees, or substantial activities in a given state.
Should I Work With Attorney Patel to Convert My Vermont LLC to a Florida LLC?
To topWe finalize our conversion and domestication projects with a comprehensive consultation that allows Attorney Patel to review the details of the company’s move with our clients. In addition to answering any of their remaining questions, we also provide them with a helpful checklist with instructions to help them adapt to their new responsibilities as Florida LLC owners.
As both a lawyer and an entrepreneur himself, Attorney Patel’s background gives him significant insight into the various business and legal matters faced by our clients. Remember that, as a corporate law firm, we offer a wide variety of services designed to make life easier for Florida business owners.
Moving forward with this project without legal guidance places your LLC in great jeopardy. By trusting your relocation to our Florida conversion attorney, you’ll have more time and energy to focus on running your business while we tackle the legal complexities and paperwork. Schedule with us now and get started.
Is your Vermont LLC ready for a new start? Don’t risk breaking your business’s stride — get assistance from an experienced business conversion attorney by scheduling online or calling (727) 279-5037.
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