How We Domesticate or Convert a Virginia LLC to a Florida LLC

Relocating, Domiciling, Transferring, or Converting a Virginia LLC to a Florida LLC

Updated: June 19, 2023
Reading Time: 10 Minutes

Objective:

• Domicile a Virginia Limited Liability Company (LLC) to Florida;
• Maintain the same EIN and identity of the LLC; and
• Enjoy tax benefits provided to Florida residents. 

Entities:

• Limited Liability Companies (LLCs)

Table of Contents

• What is a Conversion or Domestication?
• Does Virginia Allow LLCs to Move Out of State?
• Is My Virginia Entity Dissolved?
• Do I Need To Get a New EIN if I Domesticate My Company to Florida?
• How Does FL Patel Law PLLC Convert My Virginia LLC to a Florida LLC?
• How Long Does It Take To Complete a Domestication or Conversion to the State of Florida?
• What Are the Costs Involved in Domesticating My Virginia LLC to the State of Florida?
• What Are Some of the Risks Associated With a Conversion Gone Wrong?
• Increase Your Chances of a Successful Conversion
• What Are the Benefits of Converting My Virginia LLC to a Florida LLC?
• What Are the Tax Implications of Converting My Virginia LLC to a Florida LLC?
• Should I Work With Attorney Patel to Convert My Virginia LLC to a Florida LLC?

Virginia LLC owners might have a lot to gain by relocating operations to Florida. This is because our state is aggressively pro-business and has no state income tax, along with countless other benefits and attractions. Those interested in such a move should look into a type of legal transaction known as statutory conversion.

A project as significant and complex as converting a Virginia LLC to a Florida LLC can be intimidating. Thankfully, FL Patel Law PLLC’s assistance can make your business’s move both more convenient and more secure. To date, our firm has reorganized over 140 businesses into Florida entities, giving us both the expertise and insight needed to ensuring a successful, uninterrupted relocation.

This article will introduce you to the process that our firm would use to convert your Virginia LLC to a Florida LLC. Perhaps more importantly, it will go over how our legal team can save you time and money while working to prevent legal problems or other complications, too. It will also review some of those potential problems and complications, along with other risks that you could face by moving forward without an attorney’s guidance.

Every state has its own requirements and standards for statutory conversions that can be difficult to navigate if you’ve never done this before. Even small mistakes or missteps could cause significant pain and even lead to your LLC’s liquidation. When you hire us, we’ll walk you through each step while helping protect your business’s continuity. Read more below on the risks associated with an incorrectly executed conversion.

Statutory conversions and domestications can enable a company to change from a Virginia LLC to a Florida LLC by amending its formation state.

This process is often referred to as “domestication,” “conversion,” or “transfer” when the entity is converting to a different state. These terms are often used interchangeably.

By taking advantage of available conversion statutes, a company can go from a Virginia LLC to a Florida LLC without liquidating or otherwise interrupting the flow of business. It’s a great way to reduce the possibility of disputes, delays, and other problems while maintaining important relationships, contracts, and licenses. The Virginia LLC’s rights, assets, privileges, and liabilities will also transfer over to the converted entity.

Virginia LLCs that domesticate or convert into Florida LLCs will be regulated by the Florida Revised Limited Liability Company Act upon relocating. However, it might still also need to abide by the terms of the Virginia Limited Liability Company Act if it has a Foreign Qualification or otherwise has a nexus in that state after moving. Be sure to ask our attorney about this.

Yes, it’s possible to convert a Virginia LLC to a Florida LLC according to the Code of Virginia. Virginia corporations that want to relocate to the Sunshine State have a similar option available to them, known as corporate domestication.

No – dissolving your entity liquidates the business and can disrupt your efforts to convert a Virginia LLC to a Florida LLC. Unfortunately, we find many sources online that falsely assert that this is a necessary part of the domestication process. This is not the case. Dissolution should only be pursued when it’s time to close a business for good.

While this depends on factors unique to your business, the IRS usually allows a converted LLC to continue using its original EIN as long as its continuity is maintained and no other changes are made. Under these circumstances, the converted entity is considered to be the same one that existed in its previous state. Protecting a company’s continuity is critical in this regard, and few things can offer more protection than an attorney’s assistance.

A conversion can’t be successful without the perfect execution of a series of processes, some of which vary from state to state. Next, we’ll review a generalized outline of what we do to help our clients and protect their interests when domesticating a Virginia LLC to a Florida LLC. This is not a substitute for actual legal advice and is not guidance for your business’s specific circumstances. If that’s what you’re looking for, then schedule a consultation with our attorney now so that your conversion can get started as soon as possible.

Our firm begins the conversion process by studying our client’s business and operational structure to identify the specific goals and needs that will need to be addressed when domesticating the Virginia LLC to a Florida LLC. This helps ensure that domestication is the right choice for our clients and can also help us identify potential problems before they derail the project entirely.

We provide comprehensive support throughout the conversion process that includes:

• Drafting the Plan of Conversion and other required documents
• Ensuring compliance with the laws and other legal requirements in both states
• Filing the necessary documents with Virginia and Florida state agencies
• Updating the LLC’s operating agreement and other corporate documents to reflect its conversion from a Virginia LLC to a Florida LLC
• An exit consultation to address final concerns and questions

Converting a Virginia LLC to a Florida LLC typically takes between two or three months to complete using our firm’s tried and trusted process. With over 140 domestications and conversions to our credit, we’re confident in saying that there’s no way to do it faster.

Although we expedite our conversion and domestication filings when we can, the fact of the matter is that the state agencies in Virginia and Florida will need several weeks to process the paperwork, usually because of backlogs and other delays. This is another reason why you should consider hiring an attorney to manage converting your Virginia LLC to a Florida LLC, as mistakes could postpone your move or even liquidate the business.

Florida charges $155.00 to convert a Virginia LLC to a Florida LLC, while the fee for Virginia is $25.00. This adds up to a total of $180.00 for each state to process your filings, but other costs should be expected as well. Remember that you’ll need to pay those fees again if you make any mistakes that lead to rejected filings, too, which can add up quickly.

We provide flat fees for domestication projects for our clients. The costs will vary depending on the specific needs of their business’s transition. Schedule an initial consultation with our attorney to review your project and get a quote. We handle domestication for our clients for both states with a focus towards convenience, secured continuity, and minimized disruptions.

There are many ways that converting a Virginia LLC to a Florida LLC can go wrong, especially when not managed by an attorney. Their experience and knowledge can make all the difference when it comes to preventing costly mistakes or omissions.

Some general dangers of trying to convert your own company unassisted include:

• Noncompliance with state laws
• Revocation of the LLC’s operating authority
• Damaged credit standing
• Damaged relationships with clients and vendors
• 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 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 a Virginia LLC to a Florida LLC is that asset titles will automatically transfer over to the domesticated entity – that is, assuming the conversion 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.

Keep in mind that these are only some of the problems that can come about from a defective conversion.

With over 140 business conversions and domestications to our credit, our firm’s proven track record means that you can rest easier knowing that your interests are in safe hands when we’re the ones in charge of converting your Virginia LLC to a Florida LLC.

Attempting to convert your Virginia LLC to a Florida LLC without a lawyer’s help poses numerous risks to both you and your business’s security and future. Hiring our firm is the best way to ensure a smooth, uneventful process when relocating to the Sunshine State.

1. The LLC will no longer have an economic nexus in its original state if it no longer transacts business in Virginia after converting to a Florida LLC. Without this nexus, there is no need to continue filing with the State of Virginia.

2. Converting a Virginia LLC to a Florida LLC allows our clients to collaborate with other professionals, including accountants, lawyers, and more, who call the Sunshine State home.

3. The conversion process lets Virginia LLCs move to Florida without pausing operations or disrupting continuity.

4. The converted LLC’s Florida Articles of Organization replace the original Virginia formation documents without interruption. The company will also have the same powers, rights, benefits, privileges, exemptions, and principles that it enjoyed in its previous state.

5. Membership interest in the LLC is unaffected when converting a Virginia LLC to a Florida LLC. Property rights such as real estate carry over to the converted entity. Pending lawsuits and liabilities against the Virginia LLC also continue uninterrupted, although the Florida LLC’s name may be substituted in for clarification.

6. You do not need to live in Florida after converting a Virginia LLC into a Florida LLC.

7. Using statutory conversion to move your LLC to Florida in many cases eliminates the business’s taxable connection (nexus) to Virginia, which can reduce or do away with state income taxes. Be sure to discuss this with your tax advisor, as the specifics are unique to each business.

8. An LLC can continue using its original EIN for taxes and other reporting duties after it domesticates to Florida. The converted entity is still the same one that existed before, just with a new domicile.

9. Turning a Virginia LLC into a Florida LLC through conversion also allows the entity to keep using the same bank accounts, taxpayer ID, operations, and contracts. However, careful planning should be done before domesticating or converting a business to prevent potential errors or other problems.

There are often tax implications that result from converting a Virginia LLC to a Florida LLC. The specific implications depend on things that are unique to every business. As our firm can only provide limited and general advice in this area, this project is something that you’ll want your tax professional’s assistance with, too. Some potential changes to discuss with them before relocating are:

• State Income Tax: One reason for Florida’s popularity is that it does not impose a state income tax. Virginia, on the other hand, does have a state income tax. This means that the LLC may be able to save on state income taxes on its earnings in Florida. That said, no state in the country can exempt you from needing to file at the federal level.

• Franchise Tax: One thing that Florida and Virginia have in common is that neither has a franchise tax for LLCs. Were you to move your business to a state with this tax, then it would be yet another burden on its finances.

• Nexus: Even after converting from a Virginia LLC to a Florida LLC, a business may still need to adhere to Virginia tax laws if it still has a nexus (a taxable connection) in that jurisdiction. A nexus is usually created whenever a business has a physical presence, employees, or substantial activities in a particular state.

Our conversion clients benefit immensely from Attorney Patel’s guidance and wide variety of legal expertise over the course of their projects. A post-conversion checklist is also provided with instructions that help them ease into their new responsibilities as Florida LLC owners.

Finally, our corporate attorney will sit down for a consultation to address any remaining questions that they might have about owning an LLC in Florida. Remember that, as a corporate law firm, we offer a suite of services to support our clients that could prove useful, if not necessary, to running a business in Florida.

The consequences of a failed conversion should be underestimated at your own risk. By trusting your conversion to our Florida corporate law attorney, you’ll have more time and energy to focus on running your business while we tackle the legal complexities of its relocation. Schedule with us and get started today.

Ready to embrace the good life by moving your Virginia LLC down to beautiful Florida? Don’t risk your business’s continuity – enlist the help of an experienced business domestication attorney by calling (727) 279-5037, scheduling a time through our online calendar, or if your business is ready to move, check out our service page.

Image by paulbrady from Canva.