How FL Patel Law PLLC Can Support Your Business’s Conversion or Domestication to Florida
Hire FL Patel Law PLLC to Protect Your Business’s Corporate Identity and Avoid Unnecessary Costs and Delays While Converting or Domesticating into a Florida Entity
Using statutory conversion or domestication to move a business to Florida is a complicated endeavor regardless of your entity’s size or tax status. Even simple mistakes can delay or completely derail your relocation, or even initiate the company’s liquidation, among other risks.
The best way to ensure a smooth transition from state to state is to hire an experienced Florida law firm such as our own to manage your business’s conversion or domestication. We’ve helped reorganize over 140 businesses into Florida entities for our clients, which means that we have the insight necessary to protect your interests while setting your company up for success in its new state.
What is Statutory Conversion or Domestication in Florida?
The terms “conversion” and “domestication” are often used interchangeably, and both refer to a process available under Florida law for relocating a company to Florida with its corporate identity intact.
Florida allows limited liability companies (LLCs) and corporations from out-of-state, known as foreign entities, to convert into Florida entities if the business’s original state has similar laws authorizing the move.
Corporate conversion is allowed under the Florida Business Corporation Act:
(3) By complying with this section and ss. 607.11931-607.11935, as applicable, and by complying with the applicable provisions of its organic law, a foreign eligible entity may become a domestic corporation, but only if the organic law of the foreign eligible entity permits it to become a corporation in another jurisdiction.
LLCs, on the other hand, are allowed to convert under the Florida Revised Limited Liability Company Act:
605.1041 Conversion authorized.—
(3) By complying with the provisions of this section and ss. 605.1042-605.1046 which are applicable to foreign entities, a foreign entity may become a domestic limited liability company if the conversion is authorized by the law of the foreign entity’s jurisdiction of formation.
Unlike statutory conversion, domestication is only available to corporations. To be eligible, they must also come from states with similar laws authorizing the move:
(1) By complying with this section and ss. 607.11921-607.11924, as applicable, a foreign corporation may become a domestic corporation if the domestication is permitted by the organic law of the foreign corporation.
Can I Handle My Business’s Conversion Myself?
Attempting to manage your own conversion or domestication without an attorney’s assistance is dangerous for a number of reasons, many of which go unappreciated until it’s too late.
Many entrepreneurs ignore the hazards of the DIY route because they hope that it will be cheaper than hiring a lawyer. However, they often end up paying more in the long run after eating the costs of repeating filing fees, fines, and other penalties.
No matter how comprehensive, a DIY guide is never going to give you the same level of expertise and security that you get when your conversion or domestication is managed by an attorney. Their instructions are frequently incomplete or misleading to the point where it poses a risk to your business’s continuity.
Increase Your Chances of a Successful Conversion or Domestication With FL Patel Law PLLC
Your business’s future is too important to gamble with by trying to manage its conversion or domestication on your own. Working with our firm is the best way to protect your business’s interests – and your own – when converting your company into a Florida entity.
Preserving Your Corporate Identity
One of the most attractive benefits of statutory conversion or domestication is that, when properly executed, it allows the business to maintain its corporate identity. This includes things like the business’s name, EIN, incorporation date, and other pieces of identifying information.
That said, it’s all too easy to lose that corporate identity if you try to convert your business without an attorney’s guidance. There are multiple places in the conversion process where mistakes can outright dissolve your business. This won’t just be a small inconvenience, either, as losing your business’s corporate identity could cause it to lose out on important relationships and contracts, and even leave you personally liable for various expenses, penalties, and obligations.
Compliance With State Laws
The laws regulating statutory conversion and domestication differ greatly from state to state. In fact, some states don’t offer it at all, which means that you’ll need to find an alternative method to relocate your business to Florida. If this is the case for your business, then schedule a consultation with us now so that we can help you figure out a new strategy for relocating to Florida.
For the transition to be successful, the conversion requirements for both states must be satisfied in their entirety without any errors. The specific requirements vary depending on your jurisdiction as well. For example, certain states require businesses to acquire a tax clearance certificate or other qualifications before converting out. Thankfully, Attorney Patel is well versed in these areas and can help keep your business in compliance as it moves to Florida.
In addition to state and federal regulations, you’ll also need to stay on the right side of the IRS when converting or domesticating your business into a Florida entity. While the exact tax implications of your move will need to be reserved for your tax advisor, we can still provide some general guidance in this area. With our help, your business can also continue using the same EIN, as we are well equipped to protect the entity’s corporate identity during the move.
You’ll also need to be mindful of any differences in taxes levied at the state level. By converting to a Florida entity, you could save big on state and local sales tax, franchise tax, state income tax, and more depending on which state you’re coming from. You will also need to know whether your business still has an economic nexus in its previous state. If it does, then it will still need to stay compliant with that state’s tax laws in addition to those in Florida. This can be difficult to discern for sure without a professional’s guidance.
Move Forward With Confidence
The DIY path is one filled with doubts and regrets. We know this because we get all too many calls from business owners who are left with countless questions and concerns after handling their projects without the proper legal guidance. To make matters worse, there’s little that we can do to reassure them at that point, as we won’t have the information that we need to know whether they made any mistakes or missed any filings that could throw them out of compliance.
Partnering with our firm for your conversion or domestication means that you won’t lose any sleep wondering if regulatory penalties are waiting for you just around the corner. You won’t need to worry about which forms to fill out or what your next steps will be, either, which can be a massive time sink in and of itself. This means that you can stress less and focus more on your business during the transition with us as your ally.
What are the Risks of Doing My Own Conversion or Domestication?
If, after reading this, you’re still committed to converting your own business to a Florida entity, then you should be aware that you’re exposing yourself to the following problems:
- Noncompliance with state laws
- Revocation of the LLC’s operating authority
- Damaged credit standing
- Damaged relationships with clients, vendors, and investors
- Disrupted contracts
- Loss of business continuity
- Loss of limited liability protection
- Tax implications and increased tax liabilities
- Legal disputes
- Dissolution or liquidation
- Missed opportunities
- Expensive fines
- Painful delays
- Taxes on Appreciated Assets – Depending on the LLC’s tax structure, its members could end up paying income taxes on appreciated assets if they make any errors during the conversion or domestication process. For instance, if an asset that was worth $100,000 at the company’s founding is now worth $1 million, and the company is mistakenly dissolved or liquidated, then the members could be taxed on the gained value.
- Title of Asset Issues – Another benefit of converting is that asset titles will automatically transfer over to the domesticated entity – that is, assuming the conversion or domestication process was handled correctly. This can make it difficult to prove ownership of those assets, which can cause major headaches when trying to sell a company, among other problems.
These are just some of the many complications that you can encounter when converting a business without an attorney’s help. Schedule an appointment with us today to spare yourself the trouble and let us handle your conversion or domestication for you.
How Much Will It Cost for FL Patel Law PLLC To Convert or Domesticate My Entity?
Much like the laws governing conversions, the filing fees for your project vary from state to state. There will, of course, be other costs to account for as well, and you should keep in mind that mistakes will only make things more expensive. Even if you manage to avoid accidentally dissolving your entity when conducting your conversion or domestication without an attorney’s help, those filing fees for corrected documents add up fast.
Our firm’s conversion and domestication projects are offered on a flat fee basis. The specific cost is determined based on each client’s business and the complexity of their transition. Schedule an initial consultation with Attorney Patel to review your project and get a quote for your conversion. We handle conversions for clients in both states with a focus towards efficiency and minimizing potential interruptions.
How Long Will It Take for FL Patel Law PLLC To Convert or Domesticate My Business?
Using the insight that our firm has gained from managing over 140 domestications and conversions for our clients, we have developed a streamlined methodology for relocating LLCs to Florida that emphasizes efficiency while preserving continuity. The entire process takes about two or three months to complete. With expedited filings and an experienced attorney at the helm, we can assure you that this is the fastest possible time frame for your conversion or domestication.
Regardless of which states you’re filing with, the respective agencies are going to need several weeks to process your paperwork. This means that mistakes can take weeks or even months to correct, which will mean significant delays for your conversion or domestication.
How Can FL Patel Law PLLC Help Me Convert My Business?
While the specific strategy that we use for your business’s conversion or domestication will depend on its formation state and other factors, there are certain steps that all must follow. For guidance tailored to your business, please schedule a consultation with our attorney.
We provide comprehensive support throughout the conversion process that includes:
- An initial consultation and business review
- Drafting the Plan of Conversion or Domestication and other required documents
- Ensuring compliance with the laws and other legal requirements in both states
- Filing the necessary documents with both state agencies
- Updating the LLC’s operating agreement and other corporate documents to reflect the conversion or domestication
- A comprehensive consultation to address final concerns and questions
Ready to convert or domesticate your business to a Florida entity? 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 start your conversion or domestication now, check out our service page.