Can You Domesticate an Illinois Corporation in Florida?

Can You Domesticate an Illinois Corporation in Florida?

Domesticating or Moving an Illinois C or S Corporation to Florida

Florida has a lot to offer Illinois corporations looking to relocate or domesticate in our area. Aside from our white sand beaches, perhaps the most popular of these reasons is our state’s lack of any personal income tax on business owners. Domestication is a statutory process for moving a corporation from one state to another without interrupting its continuity. The equivalent for LLCs is known as a conversion. While it’s a relatively simple procedure, it’s still advisable to enlist a lawyer’s help. There are multiple documents to keep track of and a lot of legalese to sift through when domesticating or converting a business. For help from an experienced attorney, schedule a consultation with us today.

Does Illinois Allow Corporations to Move or Relocate to Florida?

Yes, according to the Illinois Entity Omnibus Act, 805 ILCS 415/301.

“ARTICLE 3.

DOMESTICATION

(Source: P.A. 100-561, eff. 7-1-18.)

    (805 ILCS 415/301)

    Sec. 301. Domestication authorized.

    (a) Except as otherwise provided in this Section, by complying with this Article, a domestic entity may become a domestic entity of the same type in a foreign jurisdiction if the domestication is authorized by the law of the foreign jurisdiction.

    (b) Except as otherwise provided in this Section, by complying with the provisions of this Article applicable to foreign entities a foreign entity may become a domestic entity of the same type in this State if the domestication is authorized by the law of the foreign entity’s jurisdiction of organization.

    (c) When the term domestic entity is used in this Article with reference to a foreign jurisdiction, it means an entity whose internal affairs are governed by the law of the foreign jurisdiction.

    (d) If a protected agreement contains a provision that applies to a merger of a domestic entity but does not refer to a domestication, the provision applies to a domestication of the entity as if the domestication were a merger until the provision is amended after the effective date of this Act.”

What Happens to My Illinois Corporation During Domestication?

Domestication is a great way to relocate your Illinois corporation because it lets you make your move without having to dissolve your business and reincorporate from scratch in Florida. You won’t need to change anything about your corporation to domesticate it in Florida, either, unless the business’s name is already taken by a Florida entity. To check a name’s availability, you can perform a simple business name search using the Department of Corporation’s database. Every other aspect of your business – its Employer Identification Number and even its incorporation date – stays the same. All contractual rights, property, and real estate will remain with the domesticated business as well.

What are the Effects of Domestication?

The impact that domestication will have on your corporation is negligible. The process poses no risk to your business’s continuity unless there’s a major mistake made when filing, and this risk can be minimized by hiring a lawyer to handle your domestication for you. The corporation’s stock, securities, eligible interests, and other obligations all retain their value, and the director’s ownership in the company will remain the same. Shareholder rights are similarly preserved by the conversion’s terms, the FBCA, and the new Florida Articles of Incorporation. Any debts, liabilities, lawsuits, or other legal proceedings faced by the corporation in Illinois will follow the business to Florida as well.

Does My Illinois Corporation Dissolve When I Domesticate to Florida?

No. However, your corporation can’t conduct business in Illinois after domesticating to Florida without filing for a foreign qualification. 

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

In most cases, an Illinois corporation without much real estate can expect their domestication to Florida to take anywhere between 1 and 4 weeks. If you need a more exact time frame, ask your lawyer after they’ve reviewed your business.

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

Domesticating your Illinois corporation to Florida will most likely begin by drafting a Plan of Domestication. This document is exactly what it sounds like. Your Plan outlines the statutory process for moving your company from one state to another. It needs to cite the statutes authorizing the domestication and should also record who owns what in the corporation, the transfer of rights and obligations, as well as any expected tax consequences that might result from the move. Once the board of directors and shareholders have approved the Plan, you can file the necessary paperwork with both states. Make sure you have everything you need – some states require Plans of Domestication to include supplementary documents.

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

Without a doubt – and that’s especially true if this is your first time domesticating a corporation. Our attorney’s experience domesticating corporations from across the country – including Illinois – means that you can focus on running your business while we handle all the stressful paperwork. We’ve worked with clients from every industry, including consultants, e-commerce businesses, and much more.

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 an Illinois Corporation?

Yes! Florida allows corporations formed in other states to domesticate so long as that state’s statutes allow it as well. 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.

 

(Source: P.A. 100-561, eff. 7-1-18.)

Ready to take your Illinois corporation down to the Sunshine State? Don’t risk breaking your business’s stride — get assistance from an experienced business conversion and domestication attorney by calling (727) 279-5037 or visit us online.

Image by Source from Pexels.

About Us

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

Have a Question?