Can You Domesticate a Pennsylvania Corporation in Florida?

Can You Domesticate a Pennsylvania Corporation in Florida?

Domesticating or Moving a Pennsylvania Corporation to Florida 

Owners of Pennsylvania corporations who are interested in relocating their businesses to Florida should take a moment to familiarize themselves with our state’s domestication process. Domestication is a method for changing a corporation’s state of formation, which could allow your Pennsylvania corporation to change into a Florida corporation. There are many ways that you and your business could stand to benefit from moving to the Sunshine State. For example, you won’t be subject to a personal income tax at the state level, and all branches of Florida’s government have unimpeachably pro-business records. 

What Happens to My Pennsylvania Corporation During Domestication? 

Domestication is one of the better ways to move your corporation to Florida because it has no impact on its continuity and you can keep transacting business while you wait for your filings to go through. It’s also a lot easier than dissolving your Pennsylvania corporation and restarting from scratch in a new jurisdiction, too.

An entity that has been domesticated to Florida is the same business that it was in its original state. The only difference is that its formation state has been changed, and the corporation will subsequently be treated as if it had incorporated in Florida from the start. The corporation’s EIN and start date will stay the same, and it will retain any and all contractual or property rights. It may, however, need a new name if the one it used in Pennsylvania is already taken by a Florida entity. Be sure to perform a name availability search to find out for sure. 

What are the Effects of Domestication? 

Other than altering your corporation’s formation state, the impact that domestication will have on your business is negligible. Once processed by the state, your Florida Articles of Incorporation will replace your Pennsylvania formation documents without delay. The shareholder’s rights will be preserved during the move by the FBCA and the terms of conversion, as will the value of their shares, their securities, their rights to acquire new shares in the company, and any obligations that are in place. Keep in mind, however, that the same goes for debts, liabilities, and lawsuits faced by the Pennsylvania corporation, which will also carry over to the Florida corporation post-domestication. 

Does My Pennsylvania Corporation Dissolve Upon Domesticating to Florida? 

Simply put, no, your Pennsylvania corporation won’t dissolve when domesticating to Florida unless a major mistake is made during the filing process. You should know, though, that the domesticated business does lose its ability to transact business in its initial formation state without first filing for a Foreign Qualification. 

How Long Does it Take to Relocate My Pennsylvania Corporation to Florida? 

Unless your Pennsylvania corporation owns real estate, you can most likely expect the domestication to be over within 4 to 12 weeks. Your attorney can give you a more exact timeline after reviewing your business and its assets. 

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

You probably won’t be surprised to learn that domesticating your Pennsylvania corporation to Florida requires filing a significant amount of paperwork. The first document that you’ll need is called a Plan of Conversion, which serves as an outline of how the domestication will take place. It needs to include any information pertaining to the domestication, too, such as the company’s ownership, anticipated tax consequences, and the transfer of rights and obligations. The Plan also needs to cite the relevant statutes in both Pennsylvania and Florida. Then, once the Directors have approved of the Plan, you can file the remaining paperwork called for with the appropriate agencies in each state. 

Be careful and strictly follow the instructions in both the Florida and Pennsylvania corporate domestication statutes. Failure to do so could cause major problems for your business, including potential dissolution.

Does Florida Allow the Domestication of Pennsylvania Corporations? 

Florida allows corporations from other states to domesticate and become Florida corporations just so long as the domesticating business’s original state has reciprocal statutes authorizing the move. LLCs have a similar option available to them, known as statutory conversion. A full list of the conditions to meet and the procedures to follow can be found in Section 607.0101 of the Florida Business Corporation Act (FBCA). Review this section very carefully. Mistakes here could cause dissolution.

Does Pennsylvania Allow Corporations to Domesticate or Move to Florida?

Yes, Pennsylvania corporations can domesticate and change their formation state to Florida pursuant to 15 Pa. Stat. and Cons. Stat. Ann. § 371.

(a) Domestic entities.–Except as provided in section 318 (relating to excluded entities and transactions), by complying with this chapter, a domestic entity may become a domestic entity of the same type in a foreign jurisdiction if the domestication is authorized by the laws of the foreign jurisdiction. 

Is your corporation ready to move on to the sunnier side of the East Coast? Don’t risk breaking your business’s stride because of easily avoidable mistakes. Get assistance from an experienced business domestication attorney by calling (727) 279-5037 or scheduling online today.

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