Can You Relocate or Convert a Delaware LLC to a Florida LLC?

Can You Relocate or Convert a Delaware LLC to a Florida LLC?

Relocating or Converting a Delaware LLC to a Florida LLC

While Delaware is a popular place to incorporate a business, many companies founded in Delaware come to realize that the state’s popularity among large corporations doesn’t necessarily make it the best environment to grow smaller businesses, such as LLCs. Because of that, many Delaware business owners, entrepreneurs, and consultants eventually decide to relocate to states like Florida. Our firm has helped many clients move their operations to Florida through a process called “statutory conversion.” A full version of the conditions can be found in Chapter 605 of the Florida Revised Limited Liability Company Act.

What Is a Conversion or a Domestication?

Statutory conversions transfer your Delaware LLC to Florida without interrupting your business’s continuity or forcing you to start over. Your business’s EIN, property deeds, and management structure will continue unchanged. However, you may need a new name if it has already been taken by a business in Florida. That’s why you should perform a simple name availability check. Other than that, all that changes is that your LLC is now a Florida LLC. It will be treated as if it had been a Florida LLC since its incorporation.

Does Delaware Allow Limited Liability Companies to Move Out of State?

Yes. As of the writing of this article, Delaware LLCs can transfer to the state of Florida under Section 18-216 of the Delaware Limited Liability Company Act. Delaware corporations have a similar path to Florida available them called domestication.

Delaware Limited Liability Act § 18-216 Approval of conversion of a limited liability company.

(a) Upon compliance with this section, a domestic limited liability company may convert to a corporation, a statutory trust, a business trust, an association, a real estate investment trust, a common-law trust or any other incorporated or unincorporated business or entity, including a partnership (whether general (including a limited liability partnership) or limited (including a limited liability limited partnership) or a foreign limited liability company.

Del. Code Ann. title 6, § 18-216

How Do I Convert My Delaware LLC to a Florida LLC?

Your LLC’s conversion begins with drafting a plan of conversion. This plan details the process for converting your Delaware LLC into a Florida LLC. Once drafted, the plan of conversion then needs to be approved by the LLC’s owners, known as the Members. Then the appropriate paperwork can be filed with the respective agencies in both states. You should review the conversion sections of the Limited Liability Company Act and follow the exact steps prescribed by the statutes of both the state of Florida and the state of Delaware. Failure to do so carries severe penalties.

What Are the Effects of Converting My LLC?

A successful conversion cancels out your Delaware Articles of Organization and immediately replaces them with those filed with the state of Florida. Your LLC is still the same business entity that existed back in Delaware, just with a new home base. Membership interest will remain the same, as will the original ownership structure. Any real estate or other property rights originally vested in the Delaware LLC will stay with the converted entity, too. You should, however, be aware that this is also the case for any of the converting business’s liabilities, as well as for any lawsuits against the original Delaware LLC. Both will follow your business to the state of Florida.

Should I Work With a Lawyer to Convert My LLC?

 Mistakes during the conversion process could cause you to lose liability protection, discourage potential investors, or even the liquidation of your company. 

Yes! We can help you with transferring your Delaware LLC to the state of Florida by statutory conversion. We have helped many businesses, including consultants, service businesses, and start-ups, relocate to Florida.

Are you ready to move your Delaware LLC down the New England coastline to tropical Florida?  Don’t risk breaking your business’s stride — get assistance from an experienced business conversion attorney by calling (727) 279-5037, or if you are ready to convert, check out our service page.

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

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