Can You Domesticate a California Corporation to Florida?

Can You Domesticate a California Corporation to Florida?

Updated: February 20, 2023

Domesticating or Moving a California C or S Corporation to Florida

Corporations from across the country, including California, often relocate or move to Florida by using a statutory process called “domestication.” While swapping coasts sounds like a big change, it’s often worth it for business owners who have family in our state or who want to benefit from Florida’s lower tax burdens.

Domesticating a California corporation to Florida, however, can be complicated for first-timers. That’s why it’s smart to get help from an experienced lawyer. For more, schedule a consultation with our Attorney today to domesticate your corporation to Florida. 

What Happens to California Corporations During Domestication? 

During the domestication process, a California corporation changes its place of incorporation from the State of California to the State of Florida. Afterward, it will no longer be registered in its original state and will need to file as a foreign entity if it wants to keep doing business there. However, it will still be the same entity that it was before (Ca. Corp. Code § 1158). The only big changes will be that the company will be subject to Florida law and will be treated as if it had formed in Florida from the very start.  

The EIN should remain the same, the incorporation date, as well as all contractual rights, property, and real estate all stay the same. However, a corporation may need to find a new name for the domesticated corporation if the California business’s name is already in use by an entity in Florida.  

To find out if your corporation’s original name will be available in Florida, perform a simple name availability search here.

What are the Effects of Domestication? 

Domestication converts a California corporation into a Florida corporation without risking interruption or discontinuity. The shareholders’ rights are protected by the terms of the conversion, the FBCA, and the Corporation’s new Articles of Incorporation. The directors’ ownership in the company remain safeguarded, as do the rights to acquire new shares.  

Similarly, domestication should not impact the value of the corporation’s stock, securities, eligible interests, or other obligations. The same goes for any debts, liabilities, lawsuits, or other legal proceedings against the California Corporation. These, too, will transfer over to the domesticated entity.  

Does My California Corporation Dissolve When Domesticating to Florida? 

No. California corporations looking to change their domicile to the State of Florida should not be dissolved. Once the process is complete, the company will be listed as “Converted Out” on the California Secretary of State’s website, rather than as “Active” or “Inactive.” This means that there’s no risk of dissolution or discontinuity unless there’s a major mistake made during filing. Hiring a Florida lawyer to manage your corporation’s domestication to Florida can significantly reduce the likelihood of these errors. 

Remember, the domesticated entity will no longer have the authorization to conduct business in California. If your corporation would like to maintain a presence in its original state, then it will need to file for a foreign qualification there first. 

How Long Will It Take to Domesticate a California Corporation to Florida? 

In many cases, domesticating a California corporation to Florida can be completed in about 4 to 6 weeks. However, it may take longer if the business owns significant real estate or if there are other complexities, complications, or considerations to deal with. Schedule a call with our attorney if you’re interested in a more exact time frame for your specific business; an estimate can be provided after reviewing your company and its assets. 

How Do I Domesticate My California C or S Corporation to Florida? 

Before California corporations can move or domesticate the business to Florida, the company’s shareholders must all agree to the proposed relocation. Once that approval has been obtained, most businesses will then need to go through the following actions. Because of the legalese involved with this kind of transition, you may want an attorney to assist with this:

  • First, draft a Plan of Conversion that includes:

  • Citations for the laws authorizing the domestication in both Florida and California,

  • Any relevant or applicable tax codes,

  • Each owner’s interest in the company, 

  • The transfer of rights and obligations, 

  • Anticipated tax consequences, and 

  • Any necessary supplemental documents. 

Should I Use FL Patel Law to Domesticate My Corporation? 

Yes, especially if this is your first time trying to move or domesticate a California corporation to Florida. Our attorney has worked to bring businesses to Florida from all across the country. Our experience is why our clients trust our firm to get the job done without issue, no matter your industry. 

Corporate transactions often come with legal and tax implications. Mistakes during the domestication process could cause you to lose liability protection, discourage potential investors, or even the liquidation of your company. It’s always worth the effort to find a qualified lawyer to assist you.

Does Florida Permit the Domestication of a California Corporation?

“Foreign business entities” refer to any business formed outside of the state in question. Businesses formed within the state are “domestic business entities.” Florida law allows foreign business entities (like California corporations) to domesticate to Florida as long as the other state has reciprocal statutes permitting the same. For more, see Section 607.11920 of the Florida Business Corporation Act (FBCA). Review this section carefully — mistakes at this point dissolve your California corporation.

Does California Allow Corporations to Move or Relocate to Florida? 

Yes, as of 2023, California corporations are allowed to move to Florida by domesticating into a Florida corporation according to the California Corporations Code Title 1, Chapter 11.5, Section 1150: 

For purposes of this chapter, the following definitions shall apply: 

(a)“Converted corporation” means a corporation that results from a conversion of a domestic other business entity, foreign other business entity, or foreign corporation pursuant to Section 1157. 

(b)“Converted entity” means a domestic other business entity, foreign other business entity, or foreign corporation that results from a conversion of a corporation under this chapter.(c)“Converting corporation” means a corporation that converts into a domestic other business entity, foreign other business entity, or foreign corporation pursuant to this chapter.(d)“Converting entity” means a domestic other business entity, foreign other business entity, or foreign corporation that converts into a corporation pursuant to Section 1157. 

(e)“Domestic other business entity” has the meaning provided in Section 167.7. 

(f)“Foreign corporation” has the meaning provided in Section 171. 

(g)“Foreign other business entity” has the meaning provided in Section 171.07. 

(h)“Other business entity” has the meaning provided in Section 174.5. 

Ca. Corp. Code § 1150 

Moving cross-country is going to take up enough of your time. Spare yourself the stress by trusting our firm to domesticate your California corporation to Florida. Don’t risk breaking your business’s stride– get assistance from an experienced business conversion and domestication attorney by calling(727) 279-5037 or visit us online.

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