What Are the Dangers of Moving, Converting, or Domesticating an Iowa Corporation to Florida Alone?

Relocate, Transfer, Convert, or Domesticate an Iowa Corporation to Florida

Updated: June 24, 2024
Reading Time: 10 Minutes

Objectives:

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

Entities:

• Iowa C Corporations
• Iowa S Corporations

Table of Contents

• What is a Domestication, Conversion, or Transfer?
• Can Iowa C or S Corporations Move to Another State?
• Will This Dissolve My Iowa 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 an Iowa Corporation to Florida?
• How Long Will It Take for FL Patel Law PLLC to Domesticate an Iowa C or S Corporation?
• How Much Does it Cost to Domesticate an Iowa 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 an Iowa C or S Corporation to Florida?
• What Tax Implications Can I Expect if I Domesticate an Iowa Corporation to Florida?
• Should I Hire FL Patel Law PLLC to Domesticate My Iowa C or S Corporation?

Iowa corporations moving to Florida can benefit from more than just our tropical climate. For example, Florida has no state income tax, and many of our other policies are designed with the interests of business owners and entrepreneurs in mind. Those interested in making this move should read on to learn more about domestication, which is a type of corporate transaction that can make this relocation into a reality.

Attempting to domesticate an Iowa corporation to Florida is a serious undertaking that can be dangerous for those without the necessary legal knowledge or experience. Working with FL Patel Law PLLC, however, allows us to apply our expertise to your company’s move, which is useful for preventing delays and other problems. Our firm has successfully reorganized over 140 businesses into Florida entities, which is why you can trust us to have the knowledge and expertise needed to manage your relocation.

This article will tell you more about what our firm does to help your company save time and money during its relocation to Florida while ensuring the safety of both the corporation and its owners. It also has some words of warning about the different risks that you could expose your company to by moving forward with this transition alone.

Our legal team is prepared to help you and your C or S corporation navigate every step of the domestication process. Without an attorney’s oversight, you could end up with fines or even accidentally dissolve your company. With our help, however, you can move forward with the confidence and peace of mind that can only come with an attorney-managed transition from state to state.

Domestication is a method available in some states that can enable C and S corporations to relocate to Florida by changing into Florida entities.

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.

Unlike some other available options, domestication allows a company to preserve its continuity and its corporate identity during its move. In other words, it’s the same business both before and after it undergoes this process. Because of this, it’s possible to maintain pre-existing relationships, contracts, and licenses, and the Iowa corporation’s rights, assets, privileges, and liabilities will transfer to the Florida corporation as well. This wouldn’t be the case if, for example, you had to dissolve your business and reincorporate as a new entity in a new state.

After you domesticate an Iowa corporation to Florida, your entity will need to abide by the rules of the Florida Business Corporation Act after it completes its transition to the Sunshine State. You should note, though, that there are some situations where your business will need to continue to follow the Iowa Business Corporation Act as well. These situations include having a foreign qualification or nexus (taxable connection) in Iowa after changing your business into a Florida entity. Talk to our attorney about this during your meeting together.

Section 490.920 of the Iowa Code, updated in 2023, allows Iowa corporations to domesticate to other states with similar laws authorizing this process. Iowa LLCs can become Florida LLCs by using a similar method commonly known as statutory conversion.

No, dissolution won’t be initiated at any point during a property managed domestication. However, the chances of accidentally dissolving your business when you domesticate an Iowa corporation to Florida spike dramatically if you attempt this transition without an attorney’s assistance. Additionally, some non-attorney sources online claim that dissolution is a necessary part of relocating a business to a new state, but this is not the case. Dissolution is only useful for shutting a business down for good.

Whether the Internal Revenue Service (IRS) will allow you to keep using the same EIN after you domesticate an Iowa corporation to Florida depends on factors specific to your company’s relocation. Maintaining your business’s continuity and corporate identity are two of the most important considerations in this regard. This is because the IRS must recognize your business as the same entity both before and after its domestication if you want to continue using your original EIN.

All domestications share a core set of necessary steps, but keep in mind that the actual requirements for a successful relocation differ from business to business due to the company’s unique needs and the specific states involved. What follows is just a general overview of the process we use to safely and efficiently domesticate an Iowa corporation to Florida, not advice or instructions for doing so. For guidance related to moving your C or S corporation to Florida, schedule your initial consultation with Attorney Patel now.

First, we host an initial consultation with our client and conduct a review of their business to confirm that it’s eligible for domestication. This investigation also gives us what we need to put together a comprehensive plan to domesticate an Iowa corporation to Florida that protects the interests of the business and its owners at every stage of the journey.

Hiring our firm to domesticate an Iowa corporation to Florida means a more convenient and secure move for you and your corporation. Our services include:

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

Thanks to our firm’s familiarity with this type of transition, we can typically domesticate an Iowa corporation to Florida in about two or three months. That said, larger companies with more assets could take longer to relocate. Our expertise also allows us to help keep your company’s move on schedule by preventing delays and interruptions.

State agencies in Iowa and Florida will each need a minimum of several weeks to process your paperwork, they often face their own delays due to backlogs and short staffing as well. It’s important to keep in mind that, because of this, any documents that need to be filed a second or third time can cause serious delays to your company’s relocation when you domesticate an Iowa corporation to Florida.

Iowa charges $50.00 for domestication filings and Florida charges $128.75, so your paperwork alone is going to cost at least $178.75. That number will go higher if you make any mistakes that require you to file again, as not every agency offers refunds. Errors could also lead to additional expenses in other areas, too, such as if your company is thrown out of regulatory compliance or accidentally dissolved because you tried to domesticate an Iowa corporation to Florida without a lawyer’s help.

Our corporate law firm offers flat fees for our domestication services based on the specific demands of that company’s relocation. Remember that an attorney’s oversight is a powerful tool when it comes to preventing unexpected costs when you domesticate an Iowa corporation to Florida. Schedule your consultation with Attorney Patel now to get a quote for your project.

The chances for missteps when domesticating a company to a new state are too numerous to include here in their entirety. However, we’ve included some of the most dangerous and relevant ones below. The chances of things going wrong when attempting to domesticate an Iowa corporation to Florida go up dramatically if you don’t have a law firm to help you through the process.

Some of the risks of proceeding to domesticate an Iowa corporation to Florida without the help of an attorney include:

• Noncompliance with state laws
• Revocation of the Iowa 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 when you domesticate an Iowa corporation to Florida, 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.

Once again, this list is not comprehensive despite its length. Only an attorney can know all of the different risks that need to be accounted for when trying to domesticate an Iowa corporation to Florida.

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 an Idaho corporation to Florida securely, efficiently, and with everyone’s interests protected at every stage of the project.

Without an attorney to help guide you through the more difficult parts of the process, there’s no guarantee that your company will make it to Florida without issue, assuming that it’s able to relocate at all. Working with a legal team as experienced as ours is the best way to ensure success when you domesticate an Iowa corporation to Florida.

1. If your company’s nexus in Iowa is removed by its domestication, then your company will not be required to file with the State of Iowa ever again.

2. Becoming a Florida business owner means that you can collaborate with Florida professional accountants, attorneys, and other important service providers who can prove useful in your company’s future.

3. Working with our corporate law firm to domesticate an Iowa Corporation to Florida gives you the convenience of a smooth transition from state to state free from interruptions or other hassles.

4. Florida Articles of Incorporation will replace your company’s original Iowa formation documents upon filing. This ensures its continuity and allows it to benefit from the same corporate powers, rights, benefits, exemptions, privileges, and principles in Florida that it enjoyed back in Iowa.

5. The value of your C or S corporation’s stock and the number of shares that it has issued will remain the same during its domestication to Florida. The Iowa corporation’s real estate and other property rights will also carry over to the domesticated entity without issue. However, this also goes for any liabilities or lawsuits faced by the corporation. The Florida corporation’s name may be substituted in place of the Iowa entity’s name for any pending legal procedures or actions.

6. The corporation’s shareholders aren’t required to live in Florida after their company’s move.

7. After it becomes a Florida entity, your business won’t need to continue having a nexus (taxable connection) in Iowa. This could lead to a lower tax burden in relation to state income taxes and/or other taxes that your corporation was responsible for in Iowa. Talk to your tax professional about this, as tax implications will vary from business to business.

8. The only thing that domestication will change about your company’s corporate identity is its formation state, which allows it to keep using the same EIN to report taxes as a Florida entity that it used in Iowa.

9. This preservation of your business’s corporate identity also lets it continue using the same bank accounts, the same taxpayer ID, the same operations, and the same contracts that it did before relocating. However, this might not be the case without careful planning, research, and legal guidance.

Be sure to consult with your chosen tax professional before you domesticate an Iowa corporation to Florida. Moving across state lines is almost certainly going to have some tax implications that your company needs to prepare for, although they won’t all necessarily be negative. However, their help will be needed, as our legal team can only give limited advice on tax matters. Some common potential changes to bring up with them are:

• State Income Tax: Because Florida has no state income tax, your business might only be left with income tax responsibilities at the federal level if it no longer has a nexus in Iowa after its domestication. This is one of the many ways that relocating your C or S corporation to Florida could save you money in the long run.

• Franchise Tax: Florida has no franchise tax for corporations, either. After you domesticate an Iowa corporation to Florida will need to close its account with the Iowa Department of Revenue and file final returns if necessary.

• Nexus: Your company needs to obey the tax laws of any state where it has a nexus, regardless of its domicile or formation state. Nexus is usually established when a company has a physical presence, employees, or substantial activities in a given state.

Once we’ve successfully domesticated their corporation to Florida, our clients meet with Attorney Patel for a final consultation. This meeting gives him a chance to address any remaining questions or concerns that they might have about their recent transition. We also use this opportunity to give our clients a helpful checklist containing instructions to help them adapt to their new responsibilities as Florida business owners.

Attorney Patel’s advice and insight can continue to benefit you and your company even after its relocation from Iowa to Florida is complete. As a corporate law firm, we are fully committed to providing services that can prove useful, if not necessary to successfully operating a corporation in Florida.

The value of an attorney’s guidance when trying to domesticate an Iowa corporation to Florida cannot be overstated. Hiring us for your relocation 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.

Moving cross-country is going to take up enough of your time. Spare yourself the stress by trusting our firm to domesticate an Iowa corporation to Florida. Don’t risk breaking your business’s stride – get assistance from an experienced corporate domestication attorney by calling (727) 279-5037 or by scheduling your consultation through our online calendar.

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