Can You Domesticate an Alabama Corporation in Florida?
Domesticating or Moving an Alabama C or S Corporation to Florida
This article is so that Alabama corporations interested in relocating to Florida can understand the process of moving their company. There are many good reasons to join us down in Florida. Not only does our state not have an income tax, but our courts are incredibly business-friendly, too. You may be able to bring your Alabama corporation to Florida through a process called “domestication.” It’s a statutory process for moving your company from one state to another. For assistance, schedule a free consultation with our business attorney to see if domestication will work for you. We even provide post-conversion support.
What Happens to My Alabama Corporation During Domestication?
Domesticating your corporation changes very little about it, aside from giving it a new principal residence. That’s why we like to recommend it when our clients ask us about their options when moving to Florida. You won’t face any interruptions during domestication, which means you can keep doing business as usual during the transfer. It’s the same corporation that you ran back in Alabama, complete with its original employer identification number (EIN or FEIN), and real estate, property, or contractual rights. It will even have the same incorporation date. That said, you might need a new name for your corporation if the one used in Alabama is already taken by a Florida entity. We suggest performing a name availability check before filing. You can do this by searching the Florida Division of Corporation’s database.
What are the Effects of Domestication?
Very little is going to change about your corporation after domestication. The shareholder’s rights are protected by the terms of the conversion, the articles of incorporation, and the FBCA. The Alabama corporation’s stock, rights to acquire stock, eligible interests, securities, and other obligations keep their original value, too. However, it’s important to note that debts, liabilities, and corporate obligations accrued by the Alabama corporation will not go away after your transfer, either. This is also the case for lawsuits and other legal proceedings, although the converted entity’s name can substitute in for clarity.
Does My Alabama Corporation Dissolve When I Domesticate to Florida?
No, your domesticating corporation is safe from dissolution. However, it can no longer do business in Alabama. To keep doing business in Alabama, then your corporation will need to file for foreign qualification.
How Long Does It Take to Relocate My Business From Alabama to Florida?
Most corporations can domesticate to Florida in about 4 to 12 weeks. However, that can vary depending on the company’s size, assets, and if it owns any real estate. Your lawyer can give you a more exact estimate after reviewing your business.
How Do I Domesticate My Alabama C or S Corporation to Florida?
The corporate domestication process most often starts with drafting a plan of domestication. This document details how the domestication will occur. It covers important information like the state statutes authorizing domestication, the company’s ownership structure, how to transfer rights and obligations, and the expected tax consequences. Both your board of directors and your shareholders need to approve the plan of conversion before proceeding. Make sure that it includes all the paperwork needed to complete the domestication. Once approved, you can file the necessary documents required by the governing agencies in both Florida and Alabama.
Should I Use FL Patel Law to Domesticate My Alabama Corporation?
Absolutely! We’ve helped business owners from across the country move their corporations to Florida. Our experience helps prevent delays and other costly inconveniences. When working with us, you’ll have access to a wealth of information and legal support relating to corporate governance in Florida. We work hard to keep our clients educated every step along the way.
Does Florida Permit the Domestication of an Alabama Corporation?
Florida allows corporations formed in other states to domesticate into Florida corporations. However, the other state must have its own laws permitting the same. A similar process exists for limited liability companies called conversion. We like to suggest domestication to our corporate clients because it helps ensure their continuity during the move. 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.
Does Alabama Allow Corporations to Domesticate or Move to Florida?
Yes, Alabama corporations can domesticate to Florida under Alabama Code Section 10A-1-8.01 (2012).
Conversion of business and nonprofit entities.
(a) A conversion of an entity to any other form of entity may be accomplished as provided in this section:
- A corporation may be converted to any other form of entity pursuant to this subsection.
- The terms and conditions of a conversion of a corporation other than a nonprofit corporation to another entity must be approved by all of the corporation’s shareholders except as otherwise provided in the corporation’s articles of incorporation; but in no case may the vote required for shareholder approval be set at less than a majority of the votes entitled to be cast by each voting group entitled by law to vote separately on the conversion. If the articles of incorporation provide for approval of a conversion by less than all of a corporation’s shareholders, approval of the conversion shall constitute corporate action subject to dissenter’s rights pursuant to Article 13 of Chapter 2 of the Alabama Business Corporation Law. No conversion of a corporation to a general or limited partnership may be effected without the consent in writing of each shareholder who is to be a general partner in the converted entity, notwithstanding any provision in the articles of incorporation of the converting corporation providing for less than unanimous shareholder approval for the conversion.
- The terms and conditions of a conversion of a nonprofit corporation to another form of entity must be approved by all the corporation’s members entitled to vote thereon, if it is a nonprofit corporation with members with voting rights, except as otherwise provided in the corporation’s certificate of formation; but in no case may the certificate of formation provide for approval by less than a majority of the members entitled to vote thereon. If the converting nonprofit corporation has no members, or no members entitled to vote thereon, the terms and conditions of the conversion must be approved by a unanimous vote of the board of directors of the converting nonprofit corporation, except as otherwise provided in the certificate of formation; but in no case may the certificate of formation provide for approval by less than a majority of the board of directors.
Our firm prides itself on its client-centric focus. We take the time to learn everything we can about your corporation and your plans for its future when domesticating your business. This way, you don’t have to worry about dissolution or other headaches along the way. Call us at (727) 279-5037 or visit our consultation page today.