Do I Need an Attorney to Convert or Domesticate a Maryland Corporation to Florida?

Relocate, Transfer, Convert, or Domesticate a Maryland Corporation to Florida

Updated: August 3, 2023
Reading Time: 10 Minutes

Objectives:

• Domicile a Maryland C or S Corporation to Florida;
• Keep the same EIN and corporate identity; and
• Enjoy tax benefits provided to Florida residents.

Entities:

• Maryland C Corporations
• Maryland S Corporations

Table of Contents

• What is a Domestication, Conversion, or Transfer?
• Can Maryland C or S Corporations Move to Another State?
• Will This Dissolve My Maryland C or S Corporation?
• Do I Need to Get a New EIN After Domesticating My C or S Corporation to Florida?
• How Can FL Patel Law PLLC Help Domesticate a Maryland Corporation to Florida?
• How Long Will It Take for FL Patel Law PLLC to Domesticate a Maryland C or S Corporation?
• How Much Does it Cost to Domesticate a Maryland Corporation to Florida?
• What Are Some of the Dangers of Domesticating a C or S Corporation Without an Attorney’s Assistance?
• Make Your Domestication More Convenient and Secure with FL Patel Law PLLC
• What Tax Implications Can I Expect if I Domesticate a Maryland Corporation to Florida?
• Should I Hire FL Patel Law PLLC to Domesticate My Maryland C or S Corporation?

Maryland business owners could find that relocating their C or S corporations to Florida provides them with many advantages ranging from reduced tax burdens to our unparalleled white sand beaches. This type of move can be made by undergoing a legal process known as domestication.

Trying to domesticate a Maryland corporation to Florida without the right legal guidance can end in disaster for both the corporation and its directors and shareholders. FL Patel Law PLLC’s experience in this field can be an invaluable asset when it comes to preventing delays and even more serious problems. Our firm has successfully reorganized over 140 businesses into Florida entities, which is why you can trust us to have the knowledge and expertise needed to manage your relocation.

This page will show you how the steps we take to domesticate a Maryland corporation to our state can help save your company time and money while also protecting its continuity. It also has some important warnings about the various risks that you’ll have to contend with if you try to attempt this project without an attorney’s help.

In addition to potential fines and delays, trying to domesticate a Maryland corporation on your own can even lead to the dissolution and liquidation of your company. Our legal team can help prevent these problems while we help you navigate your way through every stage of the domestication process.

Domestication lets a corporation change its formation state without forfeiting its corporate identity. However, both states involved must have laws authorizing this type of move for the company to qualify.

This transition is also commonly known as a “conversion” or “transfer” when the company is moved to a new state, such as when you domesticate a Maryland corporation to Florida. These terms can often be used interchangeably.

One of the main advantages of domestication is that it preserves the business’s continuity during its transition. In other words, when you domesticate a Maryland corporation to Florida, your company will still have access to the same contracts, licenses, and relationships that it had in its previous state. All of the Maryland corporation’s rights, assets, privileges, and liabilities will similarly transfer over to the resulting Florida corporation.

As a Florida entity, your business will be governed by the Florida Business Corporation Act (FBCA). However, the rules of the Maryland General Corporation Act (MGCA) could still apply to your business under certain conditions, such as if the business has a taxable connection or foreign qualification there after you domesticate a Maryland corporation to Florida. Be sure to bring this up during your initial consultation with our corporate attorney.

Yes, you can domesticate a Maryland corporation to another state like Florida in accordance with Section 3-901 of the Maryland Code. Maryland LLCs have a similar path to becoming Florida entities by using a method known as statutory conversion.

Although domestication itself won’t dissolve your business, dissolution is a risk that comes with certain mistakes that you could make if you attempt this process without legal guidance. Ignore any websites that suggest that dissolving your original business is required to domesticate a Maryland corporation to Florida, as this is not the case. Dissolution is only useful for initiating liquidation when it’s time to end the company for good.

The Internal Revenue Service (IRS) decides this depending on the specific circumstances of the company’s relocation. Our legal team’s experience with this type of transition means that we know how to help preserve a business’s original EIN when we domesticate a Maryland corporation to Florida. Protecting the C or S corporation’s continuity and corporate identity are an essential part of this.

Every domestication is different in its own way because of the different states involved and other factors unique to that particular business, but they all share some steps in common. Here we’ll describe our overall process for relocating a company to Florida. Keep in mind that these are not instructions on how to domesticate a Maryland corporation to Florida and should not be treated as such. Please schedule your initial consultation with our corporate attorney for that level of detailed and reliable guidance.

When we’re hired to relocate a company to Florida, we start with a comprehensive review of the client’s company along with an initial consultation. This serves several purposes, which include confirming the corporation’s eligibility, familiarizing ourselves with the client’s goals, and gathering the information necessary to create a custom plan to domesticate the corporation to Florida.

The support and protection that our clients benefit from when we’re hired to domesticate a Maryland corporation to Florida include:

• Drafting all documents required to domesticate a Maryland corporation to Florida, including the Plan of Domestication;
• Ensuring compliance with the laws, regulations, and other legal requirements present in both Maryland and Florida;
• Handling all filings and correspondence with Maryland and Florida state agencies;
• Updating the C or S corporation’s bylaws and other corporate documents to reflect its domestication to Florida; and
• A final consultation where our corporate lawyer will answer any questions you have left about your company’s relocation.

Our experience and refined processes allow us to domesticate a Maryland corporation to Florida in two or three months under most circumstances. This is the fastest possible timeline for relocating a company from one state to another, although it could take longer to move larger companies with significant assets.

State agencies in Florida and Maryland will each need several weeks to process your company’s documents. This means that any mistakes you make or information that you forget to include could cause serious delays for your company’s relocation. Working with us to domesticate a Maryland corporation to Florida can help keep your move on schedule, ultimately saving both time and money.

Maryland will charge $100.00 to domesticate a Maryland corporation to Florida which, when added with Florida’s filing fee of $128.75, comes to a total of $228.75 in filing fees alone. Keep in mind that proceeding without an attorney’s guidance can lead to unexpected expenses such as fines for noncompliance, tax penalties, and more.

Our firm provides flat fees for domestication projects based on the needs of the move. This makes budgeting easier for our clients and helps prevent those unexpected expenses. Schedule your consultation with Attorney Patel now to get your quote to domesticate a Maryland corporation to Florida.

Attempting to domesticate a Maryland corporation to Florida without any experience or legal guidance can expose the business, its directors, and its shareholders to a large number of risks ranging from regulatory fines to the company’s liquidation. Our corporate attorney knows how to avoid these pitfalls and dangers so that you can enjoy a transition that’s as stress-free as possible.

Proceeding to try and domesticate a Maryland corporation without an attorney’s assistance can expose the company, its directors, and its shareholders to risks that include:

• Noncompliance with state laws
• Revocation of the Maryland C or S corporation’s operating authority
• Damaged relationships with clients and vendors
• Disrupted contracts
• Loss of continuity
• Piercing the corporate veil
• Loss of liability protections
• Tax implications and increased tax liabilities
• Legal disputes
• Dissolution or liquidation
• Missed opportunities
• Expensive fines
• Painful delays
• Taxes on Appreciated Assets – The gained value of your company’s appreciated assets could pass on to its shareholders if you make a mistake when domesticating it to Florida. In other words, if something that was valued at $500,000 when the business was incorporated is now valued at $5,000,000, then you and your fellow business owners could be responsible for that increase.
• Title of Asset Problems – Without us around to make sure that everything is done correctly, then your company’s asset titles might not automatically transfer over to your Florida entity. If that happens, it can be difficult or even impossible to prove that your C or S corporation owns those assets. In addition to other problems, this can be a major roadblock if you ever try to sell your business.

Be aware that this is not a comprehensive list of the dangers of moving forward with this project alone.

Without an experienced corporate law attorney to help you navigate the different laws in each state, there’s no guarantee that your company’s domestication will be successful. Hiring a law firm is the best way to make sure that you’re equipped with the knowledge, expertise, and vigilant attention to detail necessary to domesticate a Maryland corporation to Florida.

1. Relocating your C or S corporation to Florida can free your company from its previous filing responsibilities with the State of Maryland. If domestication removes your business’s nexus in Maryland, then Maryland’s tax laws will no longer apply.

2. Moving to Florida also allows you to take your business to the next level by letting you network with Florida professional accountants, attorneys, and other service providers.

3. Working with our corporate attorney to domesticate a Maryland corporation to Florida helps ensure a transition from state to state free from interruptions, delays, or other problems that could derail the move.

4. Your business’s original formation documents will be effortlessly replaced by Florida Articles of Incorporation drafted by our firm. This allows your C or S corporation to have the same corporate powers, rights, benefits, exemptions, privileges, and principles that it did in its previous state.

5. Domestication won’t impact the value of your company’s stock or how many shares have been issued to each shareholder. During this process, real estate and other property rights will automatically transfer to the Florida entity. This is also true for any liabilities or lawsuits faced by the corporation. The Florida corporation’s name may be substituted in place of the Maryland entity’s name for any pending legal procedures or actions.

6. There’s no requirement for the directors or shareholders to live in Florida after domesticating their corporation.

7. This transition means that your company won’t need to have a taxable connection or nexus in Maryland anymore, which could result in a lower tax burden by eliminating taxes unique to Maryland. Talk to your tax professional about this, as tax implications will vary from business to business.

8. Because your domesticated entity will have the same corporate identity, it can continue using the same EIN after relocating to Florida.

9. Maintaining your C or S corporation’s continuity also allows it to keep using the same bank accounts, the same taxpayer ID, the same operations, and the same contracts that it did before relocating. However, this might not be the case without careful planning, research, and legal guidance.

Because tax laws vary from state to state, it’s vital to prepare for the tax implications of your company’s move.The specific implications will depend on your business’s unique circumstances, and because we can only provide general guidance on these matters, you should consult with your tax professional for more information. A few things to bring up with them include:

• State Income Tax: State income tax is just one way that you could lower your company’s expenses when you domesticate a Maryland corporation to Florida. Florida has no state income tax, and if your domesticated entity has no nexus in Maryland, then it will no longer be subject to Maryland’s state income tax requirements. Responsibilities at the federal level will remain.

• Franchise Tax: The State of Florida also has no franchise tax for corporations, either, which isn’t the case in Maryland. Your C or S corporation will need to close its account with the Comptroller of Maryland and file final returns if required.

• Nexus: A nexus is a company’s taxable connection in a specific state. This connection is generally established when a business has a physical presence, employees, or is otherwise conducting substantial activities in that jurisdiction. If your corporation still has a nexus in Maryland after becoming a Florida entity, then it will still need to comply with Maryland’s tax laws and responsibilities.

At the end of the project, our conversion and domestication clients have a comprehensive consultation with Attorney Patel so that he can address any remaining questions that they have about their move. They are also provided with a post-domestication checklist with instructions to help them adapt to their new responsibilities as Florida business owners.

As a corporate law firm, we provide a range of services tailored towards making life easier for our corporate clients. Attorney Patel’s vast experience as both a lawyer and an entrepreneur also mean that the advice he gives can be particularly helpful for business owners in Florida.

Protecting your interests during your company’s move is a critical part of domesticating a company to a new state. Hiring us to domesticate a Maryland corporation to Florida means that you can move forward with confidence, security, and more time to focus on what matters most: actually running your business. Schedule now to get started.

Spare yourself the stress of managing your company’s transition by trusting our firm to domesticate your Maryland C or S corporation to Florida. Don’t risk your corporation’s continuity — get assistance from an experienced corporate domestication attorney by calling (727) 279-5037 or by scheduling your consultation with us using our online calendar.

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