Can You Domesticate a North Carolina Corporation in Florida?

Can You Domesticate a North Carolina Corporation in Florida?

Domesticating or Moving a North Carolina Corporation to Florida

North Carolina business owners, consultants, and other entrepreneurs looking to move their corporations to Florida can do so through something called domestication. This is a statutory process for moving a corporation from one state to another. An analogous option exists for LLCs known as conversion. However, it’s important that you understand what’s required of you and your business before committing. For assistance, schedule a consultation with our business attorney today.

What Happens to My North Carolina Corporation During Domestication?

Domestication is often a good avenue for corporate clients moving to Florida for multiple reasons. For example, it doesn’t threaten your business’s continuity when done right. You’ll also be able to keep doing business as usual while all the paperwork is sorted out and filed. Once the process is over, the domesticated entity will still be the same business you had in North Carolina, just under a new jurisdiction. It keeps its original EIN, incorporation date, as well as its real estate, property, and contractual rights.

There is a chance, though, that you might need a new name for your corporation if the one you used in North Carolina is already in use by a Florida entity. You can check this by performing a name availability search using the Florida Division of Corporation’s website.

What are the Effects of Domestication?

The only thing that really changes about your corporation post-domestication is that its now a Florida corporation and will be considered to have been incorporated in our state from the beginning. Shareholder rights are protected by the conversion’s terms, the Florida incorporation documents, and the FBCA. Ownership in the company remains the same, as does the value of the North Carolina corporation’s stock, eligible interests, securities, and other obligations.

It’s important to note that any debts, lawsuits, liabilities, obligations, or other legal proceedings against the North Carolina corporation will follow the business to Florida. However, in the case of lawsuits, the Florida corporation’s name may be substituted in to prevent confusion.

Does My North Carolina Corporation Dissolve when I Domesticate to Florida?

Your corporation won’t be dissolved during domestication unless a major error is made during filing. You should know, however, that the domesticated corporation will no longer be allowed to conduct business in its original state. If your domesticated Florida corporation wants to keep doing business in North Carolina, then it will first need to file for foreign qualification.

How Long Does It Take to Relocate My Business From North Carolina to Florida?

Corporations without much real estate can expect their domestications to take about 1 to 4 weeks to process. For a more exact timeframe, consult with your attorney after they’ve had time to review your business’s assets.

How Do I Domesticate My North Carolina C or S Corporation to Florida?

Domesticating your North Carolina corporation to Florida begins by writing up a plan of domestication. This document will provide details for how the domestication will take place, and it may require some supplementary documents such as your founding articles of incorporation. Your plan should also note the relevant statutes authorizing domestication in both states, any anticipated tax consequences, company ownership, and the transfer of rights and obligations. Finally, once the board of directors and the shareholders have approved the plan, your North Carolina corporation can make the necessary filings to domesticate into a Florida corporation.

Be careful and strictly follow the instructions in both the Florida and North Carolina corporate domestication statutes. Failure to do so could cause major problems for your business, including potential dissolution.

Should I Use FL Patel Law to Domesticate My North Carolina Corporation?

Yes! We’ve helped businesses from across the country relocate to Florida, which has resulted in a fine-tuned process that helps ensure that your domestication takes place without any headaches or interruptions. Our firm is more than happy to offer legal support after your move, too, if you need help navigating your new state’s laws and regulations.

Corporate transactions often come with legal and tax implications. Mistakes during the domestication process could cause you to lose liability protection, discourage potential investors, or even the liquidation of your company. It’s always worth the effort to find a qualified lawyer to assist you.

Does Florida Permit the Domestication of a North Carolina Corporation?

Florida only allows corporations formed in other states to domesticate if the other state has similar laws authorizing the move. Thankfully, most states have reciprocal statutes. Our firm likes to suggest domestication to our corporate clients because it protects their business’s continuity when done right. A full list of the conditions can be found in Section 607.0101 of the Florida Business Corporation Act (FBCA). Review this section very carefully. Mistakes here could cause dissolution.

Does North Carolina Allow Corporations to Domesticate or Move to Florida?

Yes, according to §55-11A-10 of the North Carolina Business Corporation Act.

55-11A-10. Conversion.

A domestic corporation may convert to a different business entity if:

(1)        The conversion is permitted by the laws of the state or country governing the organization and internal affairs of such other business entity; and

(2)        The converting domestic corporation complies with the requirements of this Part and, to the extent applicable, the laws referred to in subdivision (1) of this section. (2001-387, s. 17.)

NCBA §55-11A-10

Are you ready to move your North Carolina corporation down the coast to sunny and beautiful Florida? Don’t risk breaking your business’s stride — get assistance from an experienced business domestication attorney by calling (727) 279-5037, or if you are ready to move, schedule a consultation online today.

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