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 dissolve it and start over again. Your business’s EIN, property deeds, and management structure will continue unchanged. However, you may need to come up with a new name for the converted entity if the name that your LLC used in Delaware has already been taken by a business in Florida. Other than that, all that really changes is that your LLC is considered to have 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 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.
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.
How Do I Convert My Delaware LLC to a Florida LLC?
Your LLC’s conversion begins with drafting a plan of conversion. As the name suggests, this plan details your methodology and 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, before 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.
What Are the Effects of Converting My LLC?
Upon the successful filing of your conversion, the Articles of Organization that your company filed in Delaware will be immediately canceled out and replaced 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 and any real estate or other property rights originally vested in the Delaware LLC.
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. These lawsuits, however, can either continue without interruption, or the Florida LLC can be substituted in instead.
Should I Work With a Lawyer to Convert My LLC?
Yes! We can help you with transferring your Delaware LLC to the state of Florida by statutory conversion. We have worked with many businesses including consultants, service businesses, e-commerce businesses, and start-ups to help them relocate their headquarters to the State of 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 flat fee service page.