Can You Domesticate a Delaware Corporation in Florida?
Domesticating or Moving a Delaware C or S Corporation to Florida
Incorporating in Delaware has become popular in recent years because some people associate the state with strong pro-business legislation compared to the rest of the country. However, unless you own a massive corporation, most of the state’s benefits are unavailable for your business. Florida has a similar business positive court system, along with the added bonus that our state levies no personal income taxes against business owners. If you have a small or medium-sized corporation in Delaware, you might be able to move it to Florida through something called “domestication.” Domestication is a statutory process that relocates your business from Delaware to Florida. For help, schedule a consultation with our corporate lawyer today.
What Happens to My Delaware Corporation During Domestication?
When clients approach us looking to relocate their businesses to Florida, we usually recommend statutory domestication because it lets them convert into a Florida corporation without interrupting or dissolving their business. The domesticated corporation is the same business that you had back in Delaware. Only the principal place of business changes — its federal employer identification number (also known as an EIN) and incorporation date stay the same, and the Delaware corporation’s real estate, property, and contractual rights remain vested in the new Florida corporation as well. That said, if the name your business had in Delaware is already in use by an entity in Florida, then you’ll need a new name. Because of this, we recommend running a simple name search using the Florida Division of Corporation’s website before officiating your move.
What are the Effects of Domestication?
Outside of changing your Delaware corporation into a Florida corporation, domestication won’t force you to change anything about your business. Shareholder rights are protected under the conversion’s terms, the FBCA, and the newly filed Florida articles of incorporation. The rights to obtain shares remain the same, as does the value of those shares, as well as the converting entity’s stock, eligible interests, securities, and other obligations. Corporations with multiple owners will retain their original ownership structure, too. However, any debts, liabilities, obligations, lawsuits, or other legal proceedings against the Delaware corporation will follow the business to Florida uninterrupted.
Does My Delaware Corporation Dissolve When I Domesticate to Florida?
Not if everything is filed properly. However, you will no longer be allowed to do business in Delaware without filing a foreign qualification first.
How Long Does It Take To Relocate My Business From Delaware to Florida?
You can expect your corporate domestication to take anywhere between 1 and 4 weeks, so long as it doesn’t have any significant real estate. For a more accurate estimate, ask your attorney after they’ve had a chance to review your corporate assets and structure.
How Do I Domesticate My Delaware C or S Corporation to Florida?
Domesticating your Delaware corporation begins by drafting a plan of domestication that explains the process for relocating the business to Florida. Your plan needs to reference the relevant statutes authorizing domestication while also covering any anticipated tax consequences, the company’s ownership structure, and the transfer of rights and obligations. Then, once approved by the corporation’s directors and shareholders, the appropriate paperwork can be filed with the respective state agencies in both Delaware and Florida.
Should I Use FL Patel Law to Domesticate My Corporation?
We certainly think so! Our firm has helped multiple businesses relocate to Florida from across the country — including from the state of Delaware. Our knowledge and experience have allowed us to create a sophisticated and streamlined process that helps ensure that your corporation can domesticate without encountering any major problems. We educate and support our clients. You won’t be left in the dark, either — you’ll get updates every step of the way. No matter your industry, we’re even ready to offer additional legal support and guidance post-domestication, too.
Does Florida Permit the Domestication of a Delaware Corporation?
Yes, so long as the other state has its own statutes authorizing domestication. We like to suggest this process in particular because it helps protect the business’s continuity. For a full list of conditions, see Section 607.0101 of the Florida Business Corporation Act (FBCA). Review this section carefully — mistakes at this point could cause corporate dissolution. Limited liability companies that want to relocate to Florida can instead use a process called statutory conversion.
Does Delaware Allow Corporations to Move or Relocate to Florida?
Yes, pursuant to the Delaware Code Section 266.
§ 266 Conversion of a domestic corporation to other entities. (a) A corporation of this State may, upon the authorization of such conversion in accordance with this section, convert to a limited liability company, statutory trust, business trust or association, real estate investment trust, common-law trust or any other unincorporated business including a partnership (whether general (including a limited liability partnership) or limited (including a limited liability limited partnership)) or a foreign corporation.
§ 266 Conversion of a domestic corporation to other entities.
(a) A corporation of this State may, upon the authorization of such conversion in accordance with this section, convert to a limited liability company, statutory trust, business trust or association, real estate investment trust, common-law trust or any other unincorporated business including a partnership (whether general (including a limited liability partnership) or limited (including a limited liability limited partnership)) or a foreign corporation.
Ready to move on down the east coast and join us in beautiful Florida? Call (727) 279-5037 to speak with our corporate attorney or visit our consultation page to learn more about our domestication services.