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. Our legislature has made it possible for out-of-state LLCs to become Florida LLCs through a statutory process called a conversion. For this to be possible, both Texas and Florida must have laws allowing it. 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’s the Difference Between a Conversion and a Domestication in Florida?

Businesses from out of state are known as “foreign” business entities. Florida allows foreign entities, such as Texas limited liability companies, to become Florida entities by undergoing either a conversion or a domestication, depending on the business’s structure. Our state statutes use the term “conversion” for incoming LLCs and “domestication” for incoming corporations. However, the opposite is true for some other states, so be sure to double check the laws in both jurisdictions before filing. For this article, we will be using Florida terminology.

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. The only change is that the Texas LLC is now considered to have been initially formed in Florida. However, you might need a new name if the Texas LLC’s name is in use 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. 10.101. CONVERSION OF DOMESTIC ENTITIES. (a) A domestic entity may convert into a different type of domestic entity or a non-code organization by adopting a plan of conversion.

(b) To effect a conversion, the converting entity must act on and the owners or members of the domestic entity must approve a plan of conversion in the manner prescribed by this code for the approval of conversions by the domestic entity or, if not prescribed by this code, in the same manner as prescribed by this code for the adoption and approval of a plan of merger by the domestic entity when the domestic entity does not survive the merger.

(c) A domestic entity subject to dissenters’ rights must provide the notice required by Section 10.355.

(d) A conversion may not take effect if the conversion is prohibited by or inconsistent with the laws of the converted entity’s jurisdiction of formation, and the formation, incorporation, or organization of the converted entity under the plan of conversion must be effected in compliance with those laws pursuant to the plan of conversion.

(e) At the time a conversion takes effect, each owner or member of the converting entity, other than those who receive payment of their ownership or membership interest under any applicable provisions of this code relating to dissent and appraisal, has, unless otherwise agreed to by that owner or member, an ownership or membership interest in, and is the owner or member of, the converted entity.

(f) A domestic entity may not convert under this section if an owner or member of the domestic entity, as a result of the conversion, becomes subject to owner liability, without the consent of the owner or member, for a liability or other obligation of the converted entity.

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

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 688 (H.B. 1737), Sec. 52, eff. September 1, 2007.

Acts 2015, 84th Leg., R.S., Ch. 32 (S.B. 860), Sec. 11, eff. September 1, 2015.

Sec. 10.102. CONVERSION OF NON-CODE ORGANIZATIONS. (a) A non-code organization may convert into a domestic entity by adopting a plan of conversion as provided by this section.

(b) To effect a conversion, the non-code organization must take any action that may be required for a conversion under the laws of the organization’s jurisdiction of formation and the organization’s governing documents.

(c) The conversion must be permitted by the laws under which the non-code organization is incorporated or organized or by its governing documents, which may not be inconsistent with the laws of the jurisdiction in which the non-code organization is incorporated or organized.

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

Moving your Texas LLC to Florida begins with drafting a plan of conversion. This document 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. Failure to follow the exact steps required by both Florida and Texas state statutes comes with severe penalties.

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

One of the biggest benefits of transferring your LLC to Florida by conversion is that it maintains your business’s continuity. The Florida Articles of Organization immediately replace your founding Texas Articles of Organization. It’s still the same business that you had before moving. Similarly, the old LLC’s membership interest converts 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, any lawsuits against or liabilities picked up by the Texas LLC will continue on to Florida, too. These lawsuits either continue without interruption or with the Florida LLC’s name 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 businesses from all industries relocate to the state of Florida.

Are you ready to trade in Tex-Mex for Cuban cuisine and move down to 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. Contact us today.

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

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