Can You Move or Relocate a California Corporation to Florida?

Can You Move or Relocate a California Corporation to Florida?

Can You Move or Relocate a California Corporation to Florida?

This article is for business owners interested in relocating or moving their California Corporations to the state of Florida. Our state attracts business owners and entrepreneurs from across the country for many reasons. For example, our state lacks a personal income tax, and both our courts and our legislature have a strong pro-business record as well. A California Corporation can become a Florida Corporation by converting the corporation into a California LLC, and either converting that LLC into a Florida LLC or into a Florida Corporation. Because this involves crossing state lines and multiple transitions from one business entity to another, an attorney’s assistance is highly recommended. 

What is Corporate Conversion?

At its most basic, corporate conversion allows a corporation to become another kind of business entity without forcing it to dissolve and start over from scratch, merge into another company, or otherwise interrupting its continuity. This can mean converting from one type of domestic entity to another, such as from a California Corporation into a California LLC, or from a domestic entity to a foreign entity, as is the case when California LLCs convert into Florida LLCs or Corporations. Each state has its own conversion process, filing requirements, and fees, which can make be difficult to navigate without a lawyer’s help.

What Happens to My California Corporation During Conversion?

With some extra work, a California corporation can relocate to Florida with its continuity intact. While your corporation will temporarily be converted into an LLC for the purposes of crossing state lines, its corporate status – and all the benefits that come with it – will be restored upon filing Articles of Conversion with Florida’s Division of Corporations. In the end, all that changes is your corporation’s jurisdiction. Otherwise, your business will be treated as if it incorporated in Florida from the start.

The converted entity’s EIN and incorporation date will stay the same. Any contractual rights, property, or real estate owned by the corporation will also be carried over during the move. You may need to find a new name for your business, however, if the one you used in California has already been taken by a Florida entity. You can check the availability of a business name in Florida by searching the Division of Corporation’s database.

What are the Effects of Moving My California Corporation to Florida?

Transferring your corporation from California to Florida will have a minimal impact on your business so long as everything is filed properly and promptly. The directors’ ownership in the company will go unchanged, as will the rights to issue and acquire new shares. The shareholders’ rights will similarly be preserved by the terms of the conversion, the FBCA, and the corporation’s new organizing documents.

Relocating your business from California to Florida will do nothing to change the value of your corporation’s stocks, securities, eligible interests, or other obligations, ether. However, it’s important to note that any debts, liabilities, lawsuits, or other legal proceedings against the California Corporation will follow it through the conversion process to Florida without interruption as well.

Will My California Entity Dissolve Upon Relocating to Florida?

No, your entity’s continuity will be unaffected when relocating from California to Florida. It’s important to note, however, that the converted entity will no longer be authorized to transact business in California without filing for a foreign qualification. Don’t worry, though – that’s something our attorney can help you out with too!

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

Transferring a California Corporation to Florida takes a little longer than transferring corporations from most other states because there are a few extra steps to take. That said, most will be completed within several weeks. The exact timeframe depends on your company’s assets, so your attorney can provide you with a more precise estimate after reviewing your business.

How Do I Relocate My California C or S Corporation to Florida?

The first step to relocating your California C or S Corporation to Florida is to convert your business into a California LLC. This is necessary because California corporations aren’t allowed to convert or domesticate straight to another state, while California LLCs suffer no such restrictions. Then, that California LLC can be converted into a Florida LLC using the statutory conversion process outlined in our Insight here. Be careful and strictly follow the instructions in both the Florida and California corporate domestication statutes. Failure to do so could cause major problems for your business, including dissolution. Once your business has been converted into a Florida LLC, it can then regain its corporate status by filing with the State of Florida.

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

Should I Use FL Patel Law to Relocate My California C or S Corporation?

Absolutely! Our attorney’s experience in relocating both corporations and LLCs to Florida from out of state means that you can trust us to take care of your company’s transition without a hitch. Our firm has worked with businesses representing a multitude of industries from across the United States. This dedication to quality and reliability is a big part of why so many of our clients come back to us for assistance with their business and legal matters time and time again.

Corporate transactions often come with legal and tax implications. Mistakes during the conversion 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 Law Allow the Domestication of Foreign Business Entities?

In Florida, a “foreign business entity” is any kind of business formed outside of our state’s jurisdiction – including California Corporations and Limited Liability Companies. Foreign business entities can become Florida business entities by way of statutory conversion or domestication just so long as their state of origin has similar laws authorizing the process. A full list of conditions for corporations can be found in Section 607.0101 of the Florida Business Corporation Act (FBCA), while conditions for LLCs are listed under Chapter 605 of the Florida Revised Limited Liability Company Act. Review this section carefully — mistakes at this point could cause corporate dissolution.

Does California Allow Corporations to Move or Relocate to Florida?

While California law does not allow California corporations to directly convert into Florida Corporations, the same restrictions don’t exist for LLCs. California Corporations that convert into California LLCs can then relocate to Florida before reclaiming their corporate status, pursuant to Section 17710.02(a) of the California Revised Uniform Limited Liability Company Act.

California Revised Uniform Limited Liability Company Act § 17710.02

(a) A limited liability company may be converted into an other business entity or a foreign other business entity or a foreign limited liability company pursuant to this article if both of the following apply:

(1) Pursuant to a conversion into a domestic or foreign general partnership or limited partnership or into a foreign limited liability company, each of the members of the converting limited liability company receives a percentage interest in the profits and capital of the converted entity equal to that member’s percentage interest in profits and capital of the converting limited liability company as of the effective time of the conversion.

(2) Pursuant to a conversion into an other business entity or foreign other business entity not specified in paragraph (1), both of the following occur:

(A) Each limited liability company interest of the same class is treated equally with respect to any distribution of cash, property, rights, interests, or securities of the converted entity, unless all members of the class consent.

(B) The nonredeemable limited liability company interests of the converting limited liability company are converted only into nonredeemable interests or securities of the converted entity, unless all holders of the unredeemable interests consent.

(b) The conversion of a limited liability company to an other business entity or a foreign other business entity or a foreign limited liability company may be effected only if both of the following conditions are satisfied:

(1) The law under which the converted entity will exist expressly permits the formation of that entity pursuant to a conversion.

(2) The limited liability company complies with all other requirements of any other law that applies to conversion to the converted entity.

Moving cross-country is going to take up enough of your time. Spare yourself the stress by trusting our firm to relocate your California corporation to Florida. 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.

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