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

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

Relocating or Converting a Texas LLC to a Florida LLC

As a state with beaches mostly known for rocks and seawalls, many Texans regularly come to Florida to enjoy our white sand beaches and reset their minds. During their travels, many small business owners, consultants, and other entrepreneurs decide that, while the Lone Star State has treated them well in the past, they’d like to move the move to Florida and take their business along with them. The state of Florida is incredibly business-friendly and has made it possible for out-of-state LLCs to become Florida LLCs through a statutory process called conversion. For this to be possible, both the state of Texas and the state of Florida must have passed laws allowing this type of conversion. A full version of the conditions for the state of Florida can be found in Chapter 605 of the Florida Revised Limited Liability Company Act.

What Happens in a Conversion?

Statutory conversions are an easy way to transfer your Texas LLC to Florida without any major disruptions. Your business will keep the same EIN, the same management structure, and own the same property deeds. All that changes it that your Texas LLC will now be treated as if it formed in Florida from the start. However, you might need to find a new name for your business if the Texas LLC’s name has already been taken by a business in Florida.

Does Texas Allow LLCs to Convert to Florida LLCs?

Yes, as of the date of this article, it is possible to transfer a Texas LLC to the state of Florida under Chapter 10, Subchapter C, Section 10 of the Texas Business Organizations Code.

Sec. 10.106. GENERAL EFFECT OF CONVERSION. When a conversion takes effect:

(1) the converting entity continues to exist without interruption in the organizational form of the converted entity rather than in the organizational form of the converting entity;

(2) all rights, title, and interests to all property owned by the converting entity continues to be owned, subject to any existing liens or other encumbrances on the property, by the converted entity in the new organizational form without:

(a) reversion or impairment;

(b) further act or deed; or

(c) any transfer or assignment having occurred;

(3) all liabilities and obligations of the converting entity continue to be liabilities and obligations of the converted entity in the new organizational form without impairment or diminution because of the conversion;

(4) the rights of creditors or other parties with respect to or against the previous owners or members of the converting entity in their capacities as owners or members in existence when the conversion takes effect continue to exist as to those liabilities and obligations and may be enforced by the creditors and obligees as if a conversion had not occurred;

(5) a proceeding pending by or against the converting entity or by or against any of the converting entity’s owners or members in their capacities as owners or members may be continued by or against the converted entity in the new organizational form and by or against the previous owners or members without a need for substituting a party;

(6) the ownership or membership interests of the converting entity that are to be converted into ownership or membership interests of the converted entity as provided in the plan of conversion are converted as provided by the plan, and if the converting entity is a domestic entity, the former owners or members of the domestic entity are entitled only to the rights provided in the plan of conversion or a right of dissent and appraisal under this code;

(7) if, after the conversion takes effect, an owner or member of the converted entity as an owner or member is liable for the liabilities or obligations of the converted entity, the owner or member is liable for the liabilities and obligations of the converting entity that existed before the conversion took effect only to the extent that the owner or member:

(a) agrees in writing to be liable for the liabilities or obligations;

(b) was liable, before the conversion took effect, for the liabilities or obligations; or

(c) by becoming an owner or member of the converted entity, becomes liable under other applicable law for the existing liabilities and obligations of the converted entity; and

(8) if the converted entity is a non-code organization, the converted entity is considered to have:

(a) appointed the secretary of state in this state as its agent for service of process in a proceeding to enforce any obligation or the rights of dissenting owners or members of the converting domestic entity; and

(b) agreed that the converted entity will promptly pay the dissenting owners or members of the converting domestic entity the amount, if any, to which they are entitled under this code.

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.

How Do I Convert my Texas LLC to a Florida LLC?

Moving your Texas LLC to Florida begins with drafting a plan of conversion that lays out the process for converting the LLC. Once approved by the Members, you will need to draft and file the appropriate paperwork with the respective state agencies. Make sure to review the conversion sections of the Limited Liability Company Act and follow the exact steps required by both Florida and Texas state statutes.

What Are the Effects of Transferring my LLC from Texas to Florida?

One of the biggest benefits of using a conversion to transfer your LLC to Florida is that it maintains your business’s continuity. The founding Texas Articles of Organization will be immediately replaced with the Articles filed in Florida. It’s still the same business that you had before moving. Similarly, the old LLC’s membership interest will be converted into Florida LLC membership interest, retaining the original ownership structure.

After the transfer, the Texas LLC’s real estate and other property rights will remain vested in the Florida LLC. Still, be aware that any lawsuits against or liabilities picked up by the Texas LLC will continue on to the Florida LLC as well. These lawsuits can either continue without interruption, or the Florida LLC can be substituted in.

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. 

Absolutely! Our firm already has experience helping multiple Texas LLCs convert into Florida LLCs. We have worked with all industries, including consultants, service businesses, e-commerce businesses, and start-ups in relocating to the state of Florida.

Are you ready to trade in Tex-Mex for Cuban cuisine and move your Texas LLC down to sunny and beautiful 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.

About Us

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

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