Can a Lawyer Domesticate or Convert an Alabama LLC to a Florida LLC?
Relocating, Domiciling, Transferring, or Converting an Alabama LLC to a Florida LLC
Updated: August 8, 202
Reading Time: 10 Minutes
- Domicile an Alabama Limited Liability Company (LLC) to Florida;
- Maintain the same EIN and identity of the LLC; and
- Enjoy tax benefits provided to Florida residents.
- Alabama Limited Liability Companies (LLCs)
Table of Contents
- What is a Conversion or Domestication?
- Does Alabama Allow LLCs to Move Out of State?
- Is My Alabama 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 Alabama 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 Alabama 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 Alabama LLC to a Florida LLC?
- What Are the Tax Implications of Converting My Alabama LLC to a Florida LLC?
- Should I Work With Attorney Patel to Convert My Alabama LLC to a Florida LLC?
Relocating a company from Alabama to Georgia can benefit both the business and its owners in multiple ways. For example, Florida has no income tax at the state level in addition to many other pro-business policies that can make life easier for business owners from around the country. This type of move can be made into a reality thanks to a legal process known as statutory conversion.
Converting an Alabama LLC to a Florida LLC can be an intimidating project once you consider all of the different risks involved, but FL Patel Law PLLC’s guidance can make all the difference and help ensure a seamless transition. Our firm has successfully reorganized over 140 businesses into Florida entities, providing us with the necessary insight to prepare them for success in their new state.
This page will tell you more about what our firm can do to help convert your Alabama LLC to a Florida LLC and how our process can even save your company time and money while ensuring that it reaches its new state safely. It also has some important warnings about the risks associated with an incorrectly executed conversion and what an attorney can do to help you avoid those pitfalls and complications.
Mistakes during the conversion process can lead to consequences that range from simple fines to the inadvertent termination of your business. Our firm guides our clients through each step while diligently minimizing delays and complications while also ensuring legal and tax compliance. Read more below to learn about the dangers of trying to convert an Alabama LLC to a Florida LLC without an attorney.
What is a Conversion or a Domestication?To top
Statutory conversion is a legal process available in certain states that your business can use to change from an Alabama LLC to a Florida LLC.
This process is often referred to as “domestication,” “conversion,” or “transfer” when the entity is converting to a different state. These terms can often be used interchangeably.
By converting your Alabama LLC to a Florida LLC, your business can change its formation state while preserving its continuity and corporate identity. This is important because it helps the business maintain the relationships, contracts, and licenses that it will need to operate after its conversion. The Alabama LLC’s rights, assets, privileges, and liabilities will also transfer over to the Florida LLC.
Your LLC will need to abide by the laws of the Florida Revised Limited Liability Company Act after its conversion is complete. However, the Alabama Limited Liability Company Law could still apply to your business in some situations, such as if your LLC still has a nexus there or obtains a foreign qualification after its move. Talk to our attorney about this during your initial consultation.
Does Alabama Allow Limited Liability Companies (LLCs) to Move Out of State?To top
Yes, you can move your company by converting an Alabama LLC to a Florida LLC according to Section 10A-1-8.01 of the Code of Alabama. Alabama corporations are similarly authorized to become Florida entities using a process commonly called domestication.
(3) LIMITED LIABILITY COMPANIES.
a. A limited liability company may be converted to any other form of entity pursuant to this subsection.
b. The terms and conditions of a conversion of a limited liability company to another entity must be approved by all of the limited liability company’s members or as otherwise provided in the limited liability company’s governing documents. No conversion of a limited liability company to a general or limited partnership may be effected without the consent in writing of each member who is to be a general partner in the converted entity, notwithstanding any provision in the governing documents of the converting limited liability company providing for less than unanimous member approval for the conversion.
(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.
Is My Alabama Entity Dissolved?To top
No, although it won’t be able to keep doing business in Alabama without first obtaining a foreign qualification. Dissolution isn’t a part of converting an Alabama LLC to a Florida LLC, despite what some misleading sources online may claim. However, there is a chance that your company could be dissolved if you make any mistakes during the conversion process, so working with an attorney is essential to protecting its continuity.
Do I Need To Get a New EIN if I Domesticate My Company to Florida?To top
Whether your company can continue using the same EIN after its conversion from an Alabama LLC to a Florida LLC will ultimately be determined by the Internal Revenue Service (IRS) depending on the specific circumstances of your company’s move. Perhaps most importantly, the Internal Revenue Service (IRS) must consider your company to be the same entity that existed in its previous state. That means its continuity must be protected at all costs and that no changes can be made to the company’s identity besides its new formation state.
How Does FL Patel Law PLLC Convert My Alabama LLC to a Florida LLC?To top
The specific requirements to convert a company depend on a number of factors unique to that business’s particular relocation. However, there are some parts of the process that all conversions will have in common. What follows is a general overview and should not be treated as instructions on how to convert an Alabama LLC to a Florida LLC. For that, you need to schedule your initial consultation with Attorney Patel.
We begin by reviewing the client’s business to confirm that it qualifies to convert from an Alabama LLC to a Florida LLC. This is used along with the information gathered during the client’s initial consultation to draft a personalized strategy for relocating the company to its new state with its continuity intact.
The comprehensive support that our firm provides when we’re hired to convert an Alabama LLC to a Florida LLC 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 Alabama and Florida state agencies
- Updating the LLC’s operating agreement and other corporate documents to reflect its conversion from an Alabama LLC to a Florida LLC
- A comprehensive consultation to address final concerns and questions
How Long Does It Take To Complete a Domestication or Conversion to the State of Florida?To top
In addition to the other benefits that our clients enjoy by hiring our firm, working with us allows your company to complete its conversion from an Alabama LLC to a Florida LLC as quickly as possible without delays or other interruptions. In most cases, this turns out to be about two or three months, although some larger companies with more significant assets will require more time.
Most of this time will be spent waiting for the relevant state agencies to process your company’s filings. Each will need a minimum of several weeks, and keep in mind that these agencies sometimes face delays of their own due to short staffing, backlogs, and other issues. Any documents that require subsequent filings to correct will also slow down your company’s transition from an Alabama LLC to a Florida LLC.
What Are the Costs Involved in Domesticating My Alabama LLC to the State of Florida?To top
Like with the other requirements to convert an LLC, the filing fees needed for your company’s transition will vary from state to state. Alabama charges $100.00 for these documents and Florida charges $155.00. This comes to a total of $155.00, and that’s just to have your paperwork processed. In addition to the other costs necessary to move your company to Florida, your expenses could be further impacted if your paperwork has any mistakes or omissions that require corrections, or even worse, throw your company out of regulatory compliance.
We provide our clients with flat fees for their conversion and domestication projects so that they can have an easier time setting a budget for their company’s move. We calculate our fees based on the unique needs of that particular client’s project. Schedule your consultation with Attorney Patel now to get a quote for converting your Alabama LLC to a Florida LLC.
What Are Some of the Risks Associated With a Conversion Gone Wrong?To top
Your company can face problems ranging from fines to outright liquidation if you try to navigate the different (and strictly enforced) requirements of each state without an attorney’s guidance. Our legal team’s expertise and attention to detail could make all the difference when it comes to preventing the kinds of mistakes that can threaten your business’s future.
Some of the risks posed to you and your business when trying to convert an Alabama LLC to a Florida LLC without our legal team’s assistance 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 Alabama 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 issues that you can encounter due to a failed conversion from one state to another.
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 converting your Alabama LLC to a Florida LLC.
Increase Your Chances of a Successful ConversionTo top
Moving forward without legal guidance places your LLC at unnecessary risk for everything from fines to dissolution. Hiring our firm to convert your Alabama LLC to a Florida LLC allows your company to benefit from the security that comes with our high degree of knowledge and experience.
What Are the Benefits of Converting My Alabama LLC to a Florida LLC?To top
1. Your company might break free of its nexus (taxable connection) to Alabama by converting from an Alabama LLC to a Florida LLC. This would mean that your business would have no need to file with the State of Alabama again after its conversion.
2. As a Florida business owner, you can work with Florida professional accountants, attorneys, and other service providers who can augment your company’s operations.
3. By hiring our firm to oversee your company’s conversion from an Alabama LLC to a Florida LLC, you help ensure a stress-free transition from state to state that’s free from delays and other problems.
4. Florida Articles of Organization will immediately replace your company’s original formation documents upon filing. This allows the Florida LLC to continue benefiting from the same powers, rights, benefits, exemptions, privileges, and principles that it enjoyed as an Alabama LLC.
5. Membership interest in the LLC will be unaffected by its conversion into a Florida entity. The Alabama LLC’s real estate and other property rights will automatically transfer over to the Florida LLC, as will any liabilities or lawsuits. Any pending legal procedures or actions can be substituted with the name of the Florida LLC.
6. The LLC’s members don’t need to live in Florida after their company’s relocation.
7. Your Florida LLC doesn’t need to have a nexus in Alabama after its conversion from an Alabama LLC. This means that your company can save money on state income taxes and/or other taxes issued in its previous formation state. Talk to your tax professional about this for more information, as the specifics will be different for every business.
8. Domestication only changes your LLC’s domicile. This means that it can use the same EIN that it was issued as an Alabama LLC after converting into a Florida LLC.
9. Converting an Alabama LLC to a Florida LLC allows the business to keep the same bank accounts, the same taxpayer ID, the same operations, and the same contracts. Depending on the size and complexity of the business, careful planning should be undertaken before engaging in domestication or conversion.
What Are the Tax Implications of Converting My Alabama LLC to a Florida LLC?To top
Preparing for the tax implications of converting your Alabama LLC to a Florida LLC can be tricky, as the specifics will change from business to business. While our legal team can give some general guidance, working with your tax professional is essential to staying compliant during your company’s move. Some common changes that you might discuss include:
- State Income Tax: Unlike Alabama, Florida has no income tax at the state level. Although responsibilities at the federal level will remain unaffected, this is one way that your company could save money by converting from an Alabama LLC to a Florida LLC.
- Franchise Tax: Florida doesn’t have a franchise tax for LLCs or corporations, either. Your business will need to close its account with the Alabama Department of Revenue and file final returns if required after its conversion.
- Nexus: Your LLC must follow the tax laws of any state that it has a nexus in. Generally, a nexus (or taxable connection) is created when a company has a physical presence, employees, or substantial activities in a specific state.
Should I Work With Attorney Patel to Convert My Alabama LLC to a Florida LLC?To top
Once the company’s transition to Florida from Alabama is complete, Attorney Patel holds a final consultation so that our clients can ask any questions that they still have about owning a business in Florida. We also provide them with a checklist and instructions to help them adapt to the responsibilities mandated by their new state.
Among the many other advantages gained by working with our firm to convert an Alabama LLC to a Florida LLC, our clients also benefit from Attorney Patel’s informed advice on business and legal matters. Keep in mind as well that as a corporate law firm, we offer a suite of services to support our clients that could prove useful, if not necessary, to your business’s future projects.
Your company deserves the convenience and security that comes with hiring us to convert it from an Alabama LLC to a Florida LLC. By trusting your relocation to our Florida conversion attorney, you’ll have more time and energy to focus on running your business while we tackle the legal complexities and paperwork. Schedule with us now and get started.
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 by scheduling your initial consultation through our online calendar.