Can You Domesticate a Washington Corporation in Florida?

Can You Domesticate a Washington Corporation in Florida?

Domesticating or Moving a Washington C or S Corporation to Florida

This article is for Washington business owners that are moving to Florida and want to bring their corporations with them through a process known as domestication. Lately, Florida’s pro-business environment has made it more appealing than ever for entrepreneurs looking for a new base of operations. Business owners don’t pay income tax in our state, either. While domestication is exclusively for corporations, Washington LLCs interested in relocation can go through a statutory conversion.

Does Washington Allow Corporations to Domesticate or Move to Florida?

Yes, under the Revised Code of Washington, Title 23B, Chapter 2B.09, Section 23B.09.010.

RCW 23B.09.010

(1) A domestic corporation may become an other entity pursuant to a plan of entity conversion if the entity conversion is permitted by the organic law of the other entity by:

(a) Complying with RCW 23B.09.030; and
(b) Filing articles of entity conversion with the secretary of state.

      

What Happens to My Washington Corporation During Domestication?

When our corporate clients contact our firm for help relocating their businesses to Florida, we almost always advise that they do so through domestication. Corporate domestication lets you move your Washington corporation to Florida without interruption or dissolving your company. It’s the same business entity that existed prior to domestication, complete with its original federal employer identification number (FEIN or EIN), incorporation date, and any real estate, property, or contractual rights held by the corporation.

That said, you may need to brainstorm a new name for your corporation if the name that it went by in Washington has already been taken by a Florida business entity. To check the availability of your desired name, perform a simple name check using the Florida Division of Corporation’s website.

What are the Effects of Domestication?

Domestication won’t change anything about your corporation other than its new principal jurisdiction. In fact, your business will now be treated as if it had incorporated in Florida from the start. The Washington shareholders’ rights are preserved by the terms of the conversion, the FBCA, and your new Florida articles of incorporation. The value of the corporation’s shares, eligible interests, securities, and other obligations will similarly keep their original value. Lawsuits, liabilities, and other legal proceedings will also continue against the domesticated entity uninterrupted, so don’t think that you can escape trouble just by hopping state lines!

Does My Washington Corporation Dissolve When I Domesticate to Florida?

There’s no risk of dissolving your Washington corporation during domestication so long as the paperwork is filed properly and on-time. However, the domesticated entity can no longer conduct business in its original state of Washington. Florida corporations interested in simultaneously operating in other states will need to file for foreign qualifications in each jurisdiction they want to do business in.

How Long Does It Take to Relocate My Business from Washington to Florida?

Most corporations without real estate can expect their domestication to take anywhere from 4 to 12 weeks depending on the size of the company and its assets. Your attorney can give you a more precise timeframe after reviewing your business.

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

For most Washington corporations, drafting a plan of conversion is the first step of the domestication process. A plan of conversion explains how the move will take place. Make sure that it covers all the necessary bases, including the statutes authorizing the domestication in both Washington and Florida, who owns what in the company, possible tax consequences, and the transfer of rights and obligations. The plan might also need supplementary documents, such as your articles of incorporation. Once the plan is approved by the board of directors and shareholders, the corporation is ready to file the appropriate paperwork with the governing agencies in both states.

Be careful and strictly follow the instructions in both the Florida and Washington 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 Washington Corporation?

Undoubtedly! Our firm has helped multiple business owners, consultants, and companies convert or domesticate to Florida. This experience means that we have a process on hand that helps ensure that your domestication occurs flawlessly. Our clients come from all across the United States and represent nearly every industry conceivable.

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 Washington Corporation?

Florida allows corporations from other states – such as Washington – to domesticate so long as the other state also has statutes authorizing domestication. We like to suggest domestication to our clients because it helps ensure their corporation’s continuity. A full list of the conditions to meet and the procedures to follow can be found in Section 607.0101 of the Florida Business Corporation Act (FBCA). Review this section very carefully. Mistakes here could cause dissolution.

Is your Washington corporation ready to escape the constant rain and relocate to sunny, tropical 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, you can schedule a consultation online.

Image by Sergei Akulich from Pexels.

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FL Patel Law PLLC is a boutique business law firm dedicated to entrepreneurs and companies.

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