Can You Relocate or Convert an Alabama LLC to a Florida LLC?
Transferring or Converting an Alabama LLC to a Florida LLC
There are many reasons for the owner of an LLC to move its operations down to Florida. For example, the Florida court system is consistently one of the most pro-business courts in the nation. As a business law firm, we’ve worked with clients across the United States – including Alabama – relocate their LLCs to Florida. This is possible through a statutory conversion. Essentially, a conversion transforms your Alabama LLC into a Florida LLC without interrupting business transactions. For a complete list of the conditions required by Florida law, please see Chapter 605 of the Florida Revised Limited Liability Company Act. Still, you’ll want to confirm that Alabama allows domestic LLCs to convert into foreign entities as well.
What Happens in a Conversion?
When you transfer your Alabama LLC to Florida through statutory conversion, you relocate your business without interruption, delay, or the risk of discontinuity. Without statutory conversions, businesses moving to other states would have to start from scratch. Nothing will change about your LLC except for its new jurisdiction. Legally, it’s the same LLC as before. Now, however, it will be treated as if it had been originally founded in Florida, too. Your business retains its previous EIN number, as well as any property deeds. However, it’s important to perform a simple name search before your conversion, because if a Florida business is already using your LLC’s name, then you’re going to have to think of a new one for the converted entity.
Does Alabama Law Allow Domestic LLCs to Convert to Florida LLCs?
As of the writing of this article, yes, Alabama does permit domestically formed LLCs to convert into Florida LLCs pursuant to the Code of Alabama 1975, section 10A-1-8. Alabama corporations have a similar process available them known as corporate domestication.
(a) One or more foreign entities may merge with one or more domestic entities, and a foreign entity may convert to a domestic entity or a domestic entity may convert to a foreign entity if:
(1) The merger or conversion is permitted by the law of the state or country under whose law each foreign entity is formed and each foreign entity complies with that law in effecting the merger or conversion. (2) In the case of a conversion, the foreign entity complies with subsection (b) of Section 10A-1-8.01. (3) In the case of a merger, the foreign entity complies with subsection (g) of Section 10A-1-8.02 if it is the surviving entity of the merger.
(b) Upon the merger or conversion taking effect, the surviving foreign entity of a merger and the foreign entity resulting from a conversion is deemed:
(1) To consent that service of process in a proceeding to enforce any obligation or any dissenter’s rights of owners of each domestic entity a party to the merger or conversion may be made by registered mail addressed to the surviving or converted entity at the address set forth in the certificate of merger or statement of conversion, as the case may be, or by any method provided by the Alabama Rules of Civil Procedure. Any notice or demand required or permitted by law to be served on the domestic entity may be served on the surviving or converted foreign entity by registered mail addressed to the surviving or converted entity at the address set forth in the plan of merger or statement of conversion, as the case may be, or in any other manner similar to the procedure provided by the Alabama Rules of Civil Procedure for the service of process; and
(2) To agree that it will promptly pay to dissenting owners of each domestic entity that is a party to the merger or conversion the amount, if any, to which they are entitled under Alabama law.
See Section 10A-1-8.
How Do I Convert my Alabama LLC to a Florida LLC?
Your Alabama LLC’s move to Florida begins with drafting a plan of conversion. This document explains the statutory mechanisms used to transfer the LLC to the new state. The LLC’s members need to approve the plan before filing the appropriate paperwork with both states. Make sure that you carefully review the conversion sections required by both states, too. Missteps in the conversion process can cause discontinuity, setting you back financially and otherwise.
What Are the Effects of Converting my LLC from Alabama to Florida?
Converting your Alabama LLC to a Florida LLC brings your business to a new state without unwanted interruptions. This is possible because your Florida Articles of Organization immediately replace your founding documents. This means that you can keep doing business over the course of your move. All the owners keep a proportional amount of membership interest in the company. Your management structure will remain intact as well. Real estate and other property rights will also remain as they were prior to the conversion.
However, the Alabama LLC’s liabilities also carry over during conversion. The same goes for any lawsuits against the business in its original state. These lawsuits will either continue unaltered or with the converted business’s name substituted in instead.
Should I Work With a Lawyer to Convert My LLC?
Yes! Hiring an experienced business attorney to help with your conversion minimizes the chances of procedural errors. 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.
Ready to move from sweet home Alabama 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 service page.