Convert or Domesticate a Virginia Corporation to Benefit from Florida Tax Laws

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

Updated: June 24, 2024
Reading Time: 10 Minutes

Objectives:

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

Table of Contents

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

Relocating a C or S corporation from a state like Virginia to Florida can provide a lot of advantages to both the company and its owners. For example, our Florida has no income tax at the state level and many other policies designed to make life easier for entrepreneurs. Those interested in taking advantage of these benefits by relocating to Florida can do so using a corporate transaction known as “domestication.“

Domesticating a corporation to a new state is a complicated project, and there are a lot of ways that things can go wrong for you and your business if you move forward without legal guidance. 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 domesticate a Virginia corporation to Florida.

This post will review the steps our firm takes to protect our clients and their companies when they hire us for their corporate domestications, as well as how our knowledge in this area can even save them time and money, too. It will also go over some of the risks that you can expose yourself to if you attempt this transition on your own.

Among other dangers, you could accidentally liquidate your company if you try to domesticate a Virginia corporation to Florida without an attorney’s assistance. Our firm helps our clients navigate each step of the process so that they can safely and conveniently relocate their company to Florida while keeping the same corporate identity.

Domestication is a method that allows corporations to change their formation state. For example, it can be used to turn a Virginia C or S corporation into a Florida C or S corporation.

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

Domestication allows business owners to move their corporations to Florida without interrupting its continuity or otherwise changing its corporate identity. Not only is this easier than dissolving and reincorporating, it also helps the business keep important relationships, licenses, and contracts that it enjoyed in its previous state. The Virginia corporation’s rights, assets, privileges, and liabilities will similarly transfer over to the domesticated entity.

The Florida Business Corporation Act (FBCA) will take over as the governing law once the corporation has been domesticated. That said, it might still need to abide by the terms of the Virginia Stock Corporation Act (VSCA) if the company has a nexus or foreign qualification in that state after its move.

It’s possible to domesticate a Virginia corporation to Florida under Section 13.1-898.2 of the Virginia Code. Virginia LLCs also have the option of becoming Florida entities by using a similar method called statutory conversion.

No. Assuming that everything is done properly, your domesticated Florida corporation will be the same entity that existed in Virginia, just with a new domicile. Dissolution is only useful for initiating liquidation, despite what some other non-attorney sources may claim. However, certain mistakes could dissolve your company if you try to domesticate a Virginia corporation to Florida without an attorney’s oversight. Working with a law firm like ours isn’t just a huge convenience – it’s an essential part to keeping your interests as secure as possible.

Whether you can keep using the same EIN after you domesticate a Virginia corporation to Florida is usually decided on a situational basis by the Internal Revenue Service (IRS). To continue using the same EIN, the domesticated corporation must be the same entity that existed in its previous state. This means that its continuity cannot be broken and that no changes can be made to its corporate identity other than its new domicile.

Every state sets its own rules and procedures for executing a corporate domestication, assuming they allow corporations to domesticate at all. However, there are some parts of the process that they all have in common. What follows is a brief overview of the steps we take to domesticate a Virginia corporation to Florida, not instructions or advice for doing so. For guidance specific to your business’s move, schedule a consultation with our corporate attorney.

Before we start to domesticate a Virginia corporation to Florida for our clients, we first review their business to make sure that it’s the best way to relocate the company. We also use this insight to develop a customized plan for domesticating the C or S corporation. This step is foundational towards preventing problems that could derail the relocation altogether.

The comprehensive support that our clients receive from us when we domesticate a Virginia corporation to Florida includes:

• Drafting all documents required to domesticate a Virginia corporation to Florida, including the Plan of Domestication;
• Ensuring compliance with the laws, regulations, and other legal requirements present in both Virginia and Florida;
• Handling all filings and correspondence with Virginia 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.

Our firm’s experience enables us to domesticate a Virginia corporation to Florida in about two or three months, which is the fastest completion time possible for this kind of transition. This efficiency is made possible by our refined processes as well as our legal team’s combined knowledge and experience handling corporate reorganizations from one state to another. Some domestications, however, may take longer depending on the size of the corporation and its assets.

Because it’s not possible to file with both states simultaneously, most of this time is spent waiting on the relevant agencies to process the paperwork necessary to domesticate a Virginia corporation to Florida. These agencies sometimes face delays of their own, so it’s essential that you don’t waste any time re-filing or correcting any mistakes with your documents if you want to keep your company’s relocation on schedule. Working with our legal team can help prevent these potential delays by making sure everything is done right the first time.

Every state gets to set their own fees for domesticating corporations. Florida charges $128.75 which, when combined with Virginia’s fee of $25.00, comes to a total of $153.75. Keep in mind that not every state offers refunds for these filings and that mistakes have the potential to multiply your expenses in this area. Fines for falling out of regulatory compliance could set your budget back, too, depending on what goes wrong when you try to domesticate a Virginia corporation to Florida unassisted.

Our firm can keep your C or S corporation’s costs down when domesticating to Florida by preventing repeated filing fees, fines, and other unexpected expenses when seeking to domesticate a Virginia corporation to Florida. We provide flat fees for domestication projects based on the specific company and the complexities of its relocation. Schedule a consultation with Attorney Patel now to get a quote for your company’s domestication.

There are many ways for a domestication to go wrong if you don’t have the experience and legal know-how necessary to ensure its success. With our attorney overseeing your C or S corporation’s move, you won’t need to worry about making the kinds of mistakes that could cause your company’s liquidation when you domesticate a Virginia corporation to Florida.

Trying to domesticate a Virginia corporation to Florida without the necessary skills can cause problems for both you and your business that include:

• Noncompliance with state laws
• Revocation of the Virginia 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.

This is not a complete list of what can go wrong during your domestication without the right guidance.

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 Virginia corporation to Florida securely, efficiently, and with everyone’s interests protected at every stage of the project.

Domesticating a C or S corporation from one state to another without an attorney’s help places your company and its owners in unnecessary jeopardy. Working with us can go a long way towards preventing interruptions, unwanted surprises, and outright disasters when working to domesticate a Virginia corporation to Florida.

1. Your company won’t need to file with the State of Virginia again if it loses its nexus (taxable connection) there after becoming a Florida entity.

2. Domesticating your Virginia C or S corporation to Florida means that you can network and collaborate with Florida professional accountants, attorneys, and other service providers essential to your business.

3. One of the many conveniences of the domestication process is that it lets your company relocate to Florida without interruptions or delays.

4. Your Virginia incorporation documents will immediately be replaced by Florida Articles of Incorporation drafted by our firm. This protects the corporation’s continuity, allowing it to keep all of its corporate powers, rights, benefits, exemptions, privileges, and principles.

5. The shareholder’s stock in the company, and the value of that stock, will not change when we domesticate a Virginia 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 Virginia entity’s name for any pending legal procedures or actions.

6. The corporation’s shareholders are not required to live in Florida after the business is domesticated.

7. Your domesticated entity doesn’t need to have a taxable connection, or nexus, in Virginia after its relocation. This means your company could reduce its state income tax burden by moving to Florida. Talk to your tax professional about this, as tax implications will vary from business to business.

8. When our firm is hired to domesticate a Virginia corporation to Florida, we help ensure that it can continue using the same EIN after relocating. Because only its domicile has changed, it’s still considered to be the same entity that existed previously and will continue reporting taxes as it always has.

9. Another reason that it can be beneficial to domesticate a Virginia corporation to Florida is that it lets it continue 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, or legal guidance.

One of the most important aspects of planning to domesticate a Virginia corporation to Florida is accounting for the possible tax implications. Our corporate attorney can only offer limited guidance on these issues, so consulting with your tax professional is vital to the success of your company’s move. A few topics to bring up in your discussion with them include:

• State Income Tax: Florida’s lack of a state income tax is one of its most attractive features for those looking to domesticate a Virginia corporation to Florida. This is one area where your company could save money with this relocation. Federal tax responsibilities, of course, will continue to exist.

• Franchise Tax: Because neither Florida nor Virginia have a corporate franchise tax, there’s no need to worry about your expenses going up in that area when you domesticate a Virginia corporation to Florida.

• Nexus: A nexus is a business’s taxable connection to a given state. This connection is generally created when a company has a physical location, employees, or otherwise engages in substantial activities in that particular state. If your C or S corporation still has a nexus in Virginia after moving to Florida, then it will be subject to the tax laws in both jurisdictions.

Thanks to his experience as both an attorney and an entrepreneur himself, Attorney Patel’s guidance can make all the difference when it comes to setting up a business for success in a new state. As a corporate law firm, we also provide a full suite of services that are essential to operating a C or S corporation in Florida.

Once their Virginia corporation has been successfully domesticated to Florida, Attorney Patel also holds a final consultation to address any remaining questions or concerns that our clients might have. During this consultation, they also receive a helpful checklist containing instructions to help them adapt to their new lives as Florida business owners.

Remember, all of the work that you’ve put into your business could be lost if you take on a project of this scale without legal guidance. Hiring us for your relocation 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.

Is your Virginia corporation ready to make the move to its new home in Florida? Don’t risk breaking your business’s stride – get assistance from an experienced corporate domestication attorney by calling (727) 279-5037 or by scheduling your consultation through our online calendar.

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