Domesticating, Relocating, or Converting an Arkansas LLC to a Florida LLC

Relocating, Domiciling, Transferring, or Converting an Arkansas LLC to a Florida LLC

Updated: March 4, 2024
Reading Time: 10 Minutes

Objectives:

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

Entities:

• Arkansas Limited Liability Companies (LLCs)

Table of Contents

• What is a Conversion or Domestication?
• Does Arkansas Allow LLCs to Move Out of State?
• Is My Arkansas 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 Arkansas 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 Arkansas 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 Arkansas LLC to a Florida LLC?
• What Are the Tax Implications of Converting My Arkansas LLC to a Florida LLC?
• Should I Work With Attorney Patel to Convert My Arkansas LLC to a Florida LLC?

You aren’t alone if you’re thinking about moving your business to Florida. Our state is an attractive prospect for companies from across the country thanks to our lack of a state income tax and many other pro-business policies. This can be done by using a legal process known as “statutory conversion” that can, for example, change an Arkansas LLC to a Florida LLC.

The potential dangers of converting an Arkansas LLC to a Florida LLC are enough to intimidate any business owner, but FL Patel Law PLLC’s guidance can make all the difference and help ensure a seamless transition. 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 introduce you to the process that our legal team uses to relocate a company from one state to another and tell you a little bit about how our experience and expertise can even save time and money along the way. It also has vital information about the potential risks involved when trying to convert an Arkansas LLC to a Florida LLC without an attorney’s oversight.

This page will introduce you to the process that our legal team uses to convert an Arkansas LLC to a Florida LLC and tell you a little bit about how our experience and expertise can even save time and money along the way. It also has vital information about the potential risks involved when undertaking this transition without an attorney’s oversight.

Eligible companies can use statutory conversion to legally change their state of formation. It’s possible, for example, to use this process to convert an Arkansas LLC to a Florida LLC.

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.

Statutory conversion can change your LLC’s formation state without forcing you to dissolve your original business and restart from scratch. In addition to minimizing disruptions, this preservation of continuity and identity helps the business maintain essential relationships, contracts, and licenses. Similarly, your company will also have the same rights, assets, privileges, and liabilities as a Florida entity that it did as an Arkansas entity.

The Arkansas Uniform Limited Liability Company Act (AULLCA) will be replaced by the Florida Revised Limited Liability Company Act (FRLLCA) as your entity’s governing law after its conversion. There are some circumstances, however, under which both laws could apply, such as if your LLC has a nexus or foreign qualification in Arkansas after becoming a Florida entity. Talk to our attorney about this during your consultation together.

The Arkansas Code Annotated allows statutory conversion for LLCs under Section 4-32-12020. Arkansas corporations are also allowed to change their formation state by using a similar process known as domestication.

Converting your Arkansas LLC to a Florida LLC isn’t the same as dissolving it. Even if it can’t do business back in its original state without a foreign qualification, it’s still the same entity that you had before, just with a new domicile. Dissolution isn’t a part of the conversion process, either, despite the incorrect assertions on some non-attorney websites. The only way that your LLC will be dissolved is if the project is derailed by the kinds of errors that can be prevented by working with an attorney.

The Internal Revenue Service (IRS) decides this on a case by case basis. Generally, they allow a converting entity to keep using the same EIN as long as there are no interruptions to its continuity. No changes can be made to its corporate identity other than to its state of formation, either. In other words, the IRS must consider your Florida LLC to be the same entity that existed back in Arkansas, just with a new place to call home.

While all statutory conversions follow a core set of procedures, they also all have their own unique variables that require specific steps to address. What follows is an overview of what these projects have in common, not instructions for how to convert an Arkansas LLC to a Florida LLC. For guidance tailored to the exact needs of your company, schedule your initial consultation with us now.

Converting an LLC with our firm’s guidance starts with an initial consultation and a review of the company that our client wants to relocate to Florida. Understanding their goals for moving their company helps us identify potential issues before they can threaten the company. It also helps us get the information that we need for its Plan of Conversion.

Our corporate law firm’s extensive LLC conversion services include:

• 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 Arkansas and Florida state agencies
• Updating the LLC’s operating agreement and other corporate documents to reflect its conversion from an Arkansas LLC to a Florida LLC
• A comprehensive consultation to address final concerns and questions

We can relocate most companies to Florida in about two or three months, although more time is sometimes required depending on the size of the company and its assets. Our noteworthy experience with these transitions enable us to complete your entity’s conversion as quickly as possible. This likely wouldn’t be the case if you tried to convert your Arkansas LLC to a Florida LLC on your own, considering that you have your own responsibilities as a business owner to take care of, too.

The state agencies in charge of processing your company’s conversion will each need at least several weeks to go through your documents, assuming that they aren’t facing any delays. As a result, you could face significant delays of your own if you make any mistakes that force you to file again. An attorney’s help navigating this process is an essential part of minimizing these types of dangers when converting an Arkansas LLC to a Florida LLC.

The filing fees necessary to convert an LLC vary from state to state. Arkansas charges $25 and Florida charges $155.00, so you can expect to pay at least $180.00 just to have your paperwork processed. Keep in mind that, in addition to any other costs required to move your business, mistakes made during this transition can lead to higher expenses as well.

Our domestication clients receive flat fees that are based on the specific demands of their company’s relocation. In other words, working with us can help prevent unexpected expenses and unwanted fines on top of many other benefits. Schedule your initial consultation now to get a quote for your company’s move to Florida.

Statutory conversion is a complicated process that calls for great attention to detail and a strong understanding of the laws in each state. Bringing an attorney on board for your LLC’s conversion helps ensure that you’re equipped with the skills and knowledge necessary for a successful move from Arkansas to Florida.

If you don’t have experienced legal counsel around, then trying to convert your Arkansas LLC to a Florida LLC can expose both you and your entity to risks that include, but aren’t limited to:

• 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 an Arkansas 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.

Again, keep in mind that this isn’t a comprehensive list of the potential pitfalls that can be encountered when moving a business across state lines without an attorney’s guidance.

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 Arkansas LLC to a Florida LLC.

Don’t endanger your company and its owners by trying to convert your Arkansas LLC to a Florida LLC on your own. A lawyer’s help navigating this complex process is an essential part of ensuring that everything is done the right way.

1. You won’t need to spend any time filing with the State of Arkansas ever again if your company’s nexus (taxable connection) in Arkansas is removed by its conversion into a Florida entity.

2. As a Florida business owner yourself, you work with Florida professional accountants, attorneys, and other service providers.

3. Your LLC’s continuity will remain uninterrupted when converting it into a Florida entity.

4. Our client’s Florida Articles of Organization will immediately replace their original Arkansas founding documents. All LLC powers remain LLC powers, along with rights, benefits, exemptions, privileges, and principles.

5. The LLC’s members will retain the same amount of interest in the company after converting it from an Arkansas entity into a Florida entity. Real estate and other property rights will also transfer to the Florida LLC after conversion. However, make note that any liabilities will also remain unaffected by the conversion, as will any pending lawsuits. Any pending legal procedures or actions can be substituted with the name of the Florida LLC.

6. The LLC’s members don’t need to live in Florida after their company’s relocation.

7. Your converting LLC will no longer be required to have a taxable connection (nexus) in your company’s original formation state. This can potentially lower your tax burden at the state level after you convert your Arkansas LLC to a Florida LLC. Check with your tax professional for more guidance on taxes, as the resulting implications will vary from business to business.

8. You don’t need to obtain a new EIN for your LLC when convert an Arkansas LLC to a Florida LLC.

9. Your business can continue using the same bank accounts, the same taxpayer ID, the same operations, and the same contracts after converting it from an Arkansas LLC to a Florida LLC. That said, careful planning and legal consultation should be undertaken before starting to ensure that this is the case.

Moving a business to a new state can have major tax implications for the entity in question, some positive and some negative. The specific consequences will vary from conversion to conversion, and because our legal team can only offer some general information in this area, it’s essential to engage with a trusted tax professional for guidance when converting an Arkansas LLC to a Florida LLC. Some basic topics that you might want to bring up during your meeting with them could include:

• State Income Tax: One difference in the tax laws between Florida and Arkansas is that Arkansas has its own state income tax and Florida doesn’t. This is one of the ways that business owners are often able to lower their expenses when relocating to Florida. Federal income tax responsibilities will continue to apply.

• Franchise Tax: The State of Florida doesn’t have a franchise tax for businesses or business owners, either. The LLC will need to close its account with the Arkansas Secretary of State and file final returns if necessary.

• Nexus: If your business continues to have a nexus in Arkansas, then it may still need to comply with that state’s tax laws even after converting into a Florida entity. Nexus is generally established when a company has a physical presence, employees, or substantial activities in a given state.

At the project’s conclusion, Attorney Patel hosts a comprehensive consultation so that he can answer any remaining questions and review the conversion as a whole. Our clients are also given a post-conversion checklist with guidance for adapting to their new duties as Florida business owners.

Attorney Patel’s experience as both a corporate attorney and as an entrepreneur has gifted him with a versatile skill set that can benefit business owners regardless of their industry. 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.

Protecting yourself and your business from legal threats is critical when converting an Arkansas LLC to a Florida LLC. Trusting your conversion to our attorney gives you more time and energy to focus on your business while we handle the legal complexities of its relocation. Schedule with us now to get started.

Is your Arkansas LLC ready for a new start on the east coast? 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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