How to Convert or Domesticate a South Dakota Corporation to Florida

Relocate, Transfer, Convert, or Domesticate a South Dakota Corporation to Florida

Updated: June 24, 2024
Reading Time: 10 Minutes

Objectives:

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

Entities:

• South Dakota Corporations

Table of Contents

• What is a Domestication, Conversion, or Transfer?
• Can South Dakota C or S Corporations Move to Another State?
• Will This Dissolve My South Dakota 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 South Dakota Corporation to Florida?
• How Long Will It Take for FL Patel Law PLLC to Domesticate a South Dakota C or S Corporation?
• How Much Does it Cost to Domesticate a South Dakota 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 Are the Benefits of Domesticating a South Dakota C or S Corporation to Florida?
• What Tax Implications Can I Expect if I Domesticate a South Dakota Corporation to Florida?
• Should I Hire FL Patel Law PLLC to Domesticate My South Dakota C or S Corporation?

Florida is well known for its many pro-business policies, and that fact has entrepreneurs from across the country wondering how they can relocate their operations to our state. The good news is that many have the option of making this move without giving up their business’s corporate identity. This is thanks to a legal process known as “domestication” that qualifying corporations can use to change their state of formation.

Unless you have an attorney around to prevent possible legal and compliance issues, trying to domesticate a South Dakota corporation to Florida can present many challenges and complications. 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 Insight article will review the refined procedure that our legal team developed to help our clients relocate their businesses to Florida and explain how that process can save time and money. It also has some vital information concerning the dangers that both you and your company could face if you try to domesticate a South Dakota corporation to Florida without legal guidance.

The risks posed by a mismanaged move across state lines can be severe. In fact, your South Dakota corporation could be accidentally liquidated if certain mistakes are made with your company’s filings. Our corporate law firm will apply our experience and knowledge to every aspect of your company’s domestication so that its move can be as safe and convenient as possible.

Domestication is a legal process for changing a corporation’s state of formation, allowing it to move to a new state with its corporate identity intact. However, both states involved must have laws that authorize this type of relocation.

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

In addition to protecting your business’s corporate identity, using this method to relocate it to Florida won’t interrupt its continuity, either. It’s also an easier option when compared to dissolving the business and reincorporating it all over again. This helps ensure that the domesticated entity can retain the same contracts, relationships, licenses, rights, assets, privileges, and liabilities that were in place in its previous domicile.

The Florida Business Corporation Act (FBCA) will become the governing law for your business upon its domestication into a Florida entity. However, there are some companies that will still need to follow the South Dakota Business Corporation Act (SDBCA) under some circumstances, such as if it has a nexus or foreign qualification in South Dakota. Talk to our attorney about this during your consultation together.

It’s possible to domesticate a South Dakota corporation to Florida according to the South Dakota Codified Laws Section 47-1A-920.1. South Dakota LLCs can also use a similar process called “statutory conversion” if they want to become Florida LLCs as well.

Domestication won’t dissolve your original business, and dissolution isn’t necessary to domesticate a South Dakota corporation to Florida, either. The domesticated entity will still be the same entity that existed back in South Dakota assuming that the project is executed correctly. That said, certain mistakes could cause you to accidentally dissolve your business, which is another reason why you should team up with an attorney to protect your company during its move to Florida.

In order to keep using your original EIN, the Internal Revenue Service (IRS) must consider your entity to be the same business both before and after its domestication. This is determined on a case-by-case basis. This requires maintaining both its continuity and its identity at every step of the process when you domesticate a South Dakota corporation to Florida. Once they have evaluated the circumstances surrounding your company’s move, the IRS will issue a private letter with their ruling.

Careful planning should be undertaken when you domesticate a South Dakota corporation to Florida, as you need to account for the different laws in each state and the business’s own unique needs for the project to be successful. What follows is a general outline that only addresses the core components of the domestication process – these are not instructions for relocating your business from one state to another. For that kind of high detailed guidance, schedule your initial consultation with Attorney Patel now.

Once we have our initial consultation with the client, we review the business in question to confirm its eligibility. We use this opportunity to gather the information we need to draft their customized Plan of Domestication. What we learn at this stage is also used to ensure regulatory compliance and to safeguard the business from potential legal problems.

Choosing our law firm to domesticate a South Dakota corporation to Florida allows you to benefit from the following services:

• Drafting all documents required to domesticate a South Dakota corporation to Florida, including the Plan of Domestication;
• Ensuring compliance with the laws, regulations, and other legal requirements present in both South Dakota and Florida;
• Handling all filings and correspondence with South Dakota 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 at the end of the project where our corporate lawyer will answer any questions you have left about your company’s relocation.

Working with a law firm as experienced as ours to domesticate a South Dakota corporation to Florida enables you to relocate your company as fast as possible. Under most conditions, this comes down to about two or three months, but it might take longer depending on the size of your business and its assets. This efficiency comes from our years of experience working with clients to domesticate and convert entities to Florida from different states.

South Dakota and Florida state agencies will both need at least several weeks each to process your business’s domestication filings. Sometimes short staffing and backlogs can lead to delays, too. As a result, even small mistakes can lead to major setbacks when you domesticate a South Dakota corporation to Florida.

The filing fees for your corporation’s initial domestication paperwork will be different for each state. South Dakota charges $150.00 for these filings and Florida charges $128.75, so the minimum amount that you can expect to owe here will start at $278.75. On top of any other necessary expenses, keep in mind that any mistakes you make with your documents will require additional filings, which will only send costs soaring higher.

Our corporate law firm offers flat fees for domestication projects in order to help keep costs minimal for our clients. This helps them avoid unnecessary and unexpected expenses, too. We base these flat fees on the specific demands of that particular relocation. Schedule your consultation now to get a quote to domesticate a South Dakota corporation to Florida.

An attorney is an unparalleled asset when it comes to safely navigating the laws in each state during a company’s domestication to Florida. The dangers here include everything from fees to liquidation and much more. Our legal team’s expertise means that we know how to spot and prevent those dangers from ever threatening the business when you work with us to domesticate a South Dakota corporation to Florida.

Trying to domesticate a South Dakota corporation to Florida without the benefits that come with an attorney’s help can include:

• Noncompliance with state laws
• Revocation of the South Dakota C or S corporation’s operating authority
• Damaged credit standing
• 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 complete and comprehensive list of what can go wrong due to mismanagement when you domesticate a South Dakota corporation to Florida.

FL Patel Law PLLC has helped bring over 140 companies to Florida with their corporate identities intact. A track record of this caliber means that we know how to domesticate a South Dakota corporation to Florida securely, efficiently, and with everyone’s interests protected at every stage of the project.

Legal guidance is critical to securing a safe, successful relocation from one state to another for your business. Hiring us to domesticate a South Dakota corporation to Florida allows us to lend our expertise to your company’s move. This helps prevent interruptions and other unwanted surprises from derailing the project.

1. You won’t need to spend time filing with the State of South Dakota again if your company’s relocation removes its nexus (taxable connection) in its original formation state.

2. Becoming a Florida business owner yourself lets you collaborate with Florida professional accountants, attorneys, and other service providers.

3. Using domestication to move a corporation from South Dakota to Florida enables a smooth transition from one state to the other that’s free from setbacks and interruptions.

4. Florida Articles of Incorporation will replace your corporation’s South Dakota formation documents immediately upon being filed by our corporate law firm. Your corporation will also retain all of the same corporate powers, rights, benefits, exemptions, privileges, and principles.

5. The shareholder’s stock in the company, and the value of that stock will not be impacted when we domesticate a South Dakota corporation to Florida. 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 South Dakota entity’s name for any pending legal procedures or actions.

6. Your corporation’s shareholders and directors don’t need to reside in Florida in order to domesticate a South Dakota corporation to our state.

7. Changing your business into a Florida entity could remove its nexus (taxable connection) in South Dakota. Depending on your company’s circumstances, this could reduce your tax burden at the state level. Federal tax responsibilities will, of course, continue to apply after you domesticate a South Dakota corporation to Florida. Talk to your tax professional about this, as tax implications will vary from business to business.

8. You can keep using the same EIN after you domesticate a South Dakota corporation to Florida if the IRS considers it to be the same entity that it was both before and after its relocation. An attorney can help ensure that this is the case.

9. Another convenience offered by the domestication process is that your Florida entity can keep using the same bank accounts, taxpayer ID, operations, and contracts that it did as a South Dakota entity. However, this might not be the case without careful planning, research, and legal guidance.

Because of the different laws in each jurisdiction, moving a business across state lines can have serious tax implications for both you and your corporation. Our legal team will only be able to provide general information in these areas, so you’ll need to work with a tax professional to make sure that your company stays compliant with the IRS and state agencies. A few topics that you might want to bring up when consulting with your chosen tax professional could include:

• State Income Tax: Just like South Dakota, Florida has no state income tax for businesses or business owners. That means you don’t need to worry about this becoming an added expense after relocating your business to the Sunshine State. Of course, federal tax responsibilities will still apply.

• Franchise Tax: Florida corporations don’t need to pay a state franchise tax, either. This is another way that our State works to make things easier for business owners.

• Nexus: A business has a nexus, or taxable connection, in any state where it has a physical presence, employees, or conducts substantial activities. If your corporation still has a nexus in South Dakota after its reincorporation merger, then it will still need to follow South Dakota tax laws.

At the end of the project, Attorney Patel holds a comprehensive exit consultation with the client to ensure that all of their concerns have been addressed and that all of their questions have been answered. We also give them a useful post-domestication checklist with instructions to help guide them through some of their new responsibilities as Florida business owners.

Attorney Patel founded FL Patel Law PLLC to provide a suite of services to business owners – many of which could prove useful even after you domesticate a South Dakota corporation to Florida. His background as both a lawyer and an entrepreneur make his advice especially relevant for entrepreneurs who have recently relocated to our state.

Your corporation deserves all of the benefits that come with an attorney’s assistance. Hiring us to domesticate a South Dakota 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.

Are you ready for your South Dakota corporation to have a new start in sunny and beautiful Florida? Call (727) 279-5037 to speak with our corporate attorney or use our online calendar to schedule your consultation now.

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