Can You Domesticate an Alabama Corporation in Florida?
Relocate, Transfer, Convert, or Domesticate an Alabama Corporation to Florida
Updated: September 21, 2023
Reading Time: 10 Minutes
- Domicile an Alabama C or S Corporation to Florida;
- Keep the same EIN and corporate identity; and
- Enjoy tax benefits provided to Florida residents.
- Alabama C Corporations
- Alabama S Corporations
Table of Contents
- What is a Domestication, Conversion, or Transfer?
- Can Alabama C or S Corporations Move to Another State?
- Will This Dissolve My Alabama 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 an Alabama Corporation to Florida?
- How Long Will It Take for FL Patel Law PLLC to Domesticate an Alabama C or S Corporation?
- How Much Does it Cost to Domesticate an Alabama 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 an Alabama C or S Corporation to Florida?
- What Tax Implications Can I Expect if I Domesticate an Alabama Corporation to Florida?
- Should I Hire FL Patel Law PLLC to Domesticate My Alabama C or S Corporation?
While business owners from Alabama have been increasingly interested in moving their companies to Florida in recent years, there are some who worry such a move would require giving up their entity’s corporate identity. After all, Florida has a lot to offer both corporations and their owners, such as its lack of a state income tax. Those interested in making this type of move should know that it might be possible for them to use a process known as “domestication” to move an Alabama corporation to Florida.
The process to domesticate a C or S corporation to a different state is complex and presents many opportunities for things to go wrong for your business if you don’t have legal counsel. 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 an Alabama corporation to Florida.
This page will show you how the refined procedures that we have in place can help keep your company safe while also saving time and money when you hire us to domesticate an Alabama corporation to Florida. It also has some warnings that every business owner needs to know about the dangers of attempting a transition like this without the proper legal guidance.
Unless you have a lawyer to help navigate any complexities or problems that arise, trying to domesticate an Alabama corporation can end in everything from regulatory fines to the accidental dissolution of your business. Our corporate law firm can help your company meet the various requirements mandated in each state while also applying our knowledge to protecting its corporate identity and much more.
What is a Domestication, Conversion, or Transfer?To top
Domestication changes a C or S corporation’s formation state at the legal level, allowing it to move from one state to another without leaving its original corporate identity behind.
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. For example, Florida refers to this process as domestication while Alabama refers to it as a conversion.
When you domesticate an Alabama corporation to Florida, its continuity will be protected during its move unless mistakes are made due to the lack of an attorney’s help with the project. Looking out for your business’s continuity is an essential part of retaining the same contracts, relationships, and licenses that your business enjoyed in its previous state. It also allows rights, assets, privileges, and liabilities to pass seamlessly from the Alabama corporation to the Florida corporation.
The Florida Business Corporation Act (FBCA) will start governing your entity as soon as it has completed its transition into a Florida C or S corporation. That said, you should know that the Alabama Business Corporation Law (ABCL) could continue to apply even after you domesticate an Alabama corporation to Florida under certain conditions. Such conditions include having a nexus or foreign qualification in Alabama after its relocation. You should talk to our corporate attorney about this during your initial consultation.
Can Alabama C or S Corporations Move to Another State?To top
Section 10A-1-8.01 of the Code of Alabama allows Alabama C and S corporations to become entities in different states by undergoing domestication. Alabama LLCs can use a similar process known as statutory conversion to do the same.
Conversion of business and nonprofit entities.
(a) A conversion of an entity to any other form of entity may be accomplished as provided in this section:
A corporation may be converted to any other form of entity pursuant to this subsection.
The terms and conditions of a conversion of a corporation other than a nonprofit corporation to another entity must be approved by all of the corporation’s shareholders except as otherwise provided in the corporation’s articles of incorporation; but in no case may the vote required for shareholder approval be set at less than a majority of the votes entitled to be cast by each voting group entitled by law to vote separately on the conversion. If the articles of incorporation provide for approval of a conversion by less than all of a corporation’s shareholders, approval of the conversion shall constitute corporate action subject to dissenter’s rights pursuant to Article 13 of Chapter 2 of the Alabama Business Corporation Law. No conversion of a corporation to a general or limited partnership may be effected without the consent in writing of each shareholder who is to be a general partner in the converted entity, notwithstanding any provision in the articles of incorporation of the converting corporation providing for less than unanimous shareholder approval for the conversion.
The terms and conditions of a conversion of a nonprofit corporation to another form of entity must be approved by all the corporation’s members entitled to vote thereon, if it is a nonprofit corporation with members with voting rights, except as otherwise provided in the corporation’s certificate of formation; but in no case may the certificate of formation provide for approval by less than a majority of the members entitled to vote thereon. If the converting nonprofit corporation has no members, or no members entitled to vote thereon, the terms and conditions of the conversion must be approved by a unanimous vote of the board of directors of the converting nonprofit corporation, except as otherwise provided in the certificate of formation; but in no case may the certificate of formation provide for approval by less than a majority of the board of directors.
Will This Dissolve My Alabama C or S Corporation?To top
No. Preserving your C or S corporation’s continuity means not dissolving it before, during, or after its transition into a Florida C or S corporation. Some online resources incorrectly claim that dissolution is needed to domesticate an Alabama corporation to Florida, but this is not the case. That said, moving forward with this project without an attorney’s help clearing the various legal and regulatory requirements can place your business at risk of being dissolved, along with all the consequences that would entail.
Do I Need To Get a New EIN if I Domesticate My Company to Florida?To top
Although working with a corporate law firm like ours can go a long way towards ensuring that your company can keep using its original EIN after you domesticate an Alabama corporation to Florida, this is something that will ultimately be determined by the Internal Revenue Service (IRS) on a case-by-case basis. Finding reliable legal guidance is important here because the IRS will require your business’s continuity to remain intact throughout its domestication, among other factors.
How Can FL Patel Law PLLC Help Domesticate an Alabama Corporation to Florida?To top
In addition to keeping you and your company safe, we also help our clients navigate and clear the various requirements between both states. After all, every domestication project is unique due to the different factors involved. With that in mind, what follows is a general overview of our process, not instructions on how you can domesticate an Alabama corporation to Florida on your own. Please schedule your initial consultation now if you’re interested in receiving guidance from our corporate lawyer.
The first thing we do when a client contacts us to domesticate an Alabama corporation to Florida is to set up our initial consultation with them so that we can review their business and learn more about their goals for relocating. In addition to confirming the entity’s eligibility, this also gives this the information that we need to make the domestication happen as securely and conveniently as it can possibly be.
Hiring us to domesticate an Alabama corporation to Florida allows you to benefit from comprehensive support that includes:
- Drafting all documents required to domesticate an Alabama corporation to Florida, including the Plan of Domestication;
- Ensuring compliance with the laws, regulations, and other legal requirements present in both Alabama and Florida;
- Handling all filings and correspondence with Alabama 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.
How Long Will It Take for FL Patel Law PLLC to Domesticate an Alabama C or S Corporation?To top
Because of our high degree of experience and skill, we can domesticate an Alabama corporation to Florida as quickly as possible without interruptions or delays. Most businesses that work to relocate with us can expect their projects to be completed in about two or three months. However, more time could be necessary depending on the size of the corporation and its assets.
Much of this time will be spent waiting on the appropriate agencies in Alabama and Florida to process your C or S corporation’s domestication. Patience is often needed here, as these agencies are plagued by issues like backlogs and short staffing. As a result, even small mistakes can cause huge delays when trying to domesticate an Alabama corporation to Florida.
How Much Does it Cost to Domesticate an Alabama Corporation to Florida?To top
Filing fees, much like many of the other requirements mandated by the domestication process, differ from state to state. Alabama charges $100.00 and Florida charges $105.00, which means that it’s going to cost a minimum of $205.00. That’s just to have your documents processed, too. It doesn’t account for logistical costs or the expenses that could result from making mistakes with these filings if you try to domesticate an Alabama corporation to Florida without legal guidance.
Our corporate law firm provides flat fees for all of our entity domestication, conversion, and relocation services. These fees are determined by the unique demands and challenges of the company’s move. Schedule your initial consultation with Attorney Patel now to review your project and get a quote to domesticate an Alabama corporation to Florida.
What Are Some of the Dangers of Domesticating a C or S Corporation Without an Attorney’s Assistance?To top
All the work that has been invested in your business so far could be lost if something goes wrong during its relocation due to mismanagement or the lack of a lawyer’s oversight. Thanks to our years of experience with handling these types of transitions from state to state, we know exactly how to prevent the kinds of legal problems and other issues that could harm you and your company when hired to domesticate an Alabama corporation to Florida.
Unless you have reliable legal counsel helping you with your company’s move, the problems that can be encountered when domesticating an entity to a new state can include:
- Noncompliance with state laws
- Revocation of the Alabama 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 warned that this is not a comprehensive list of what can go wrong if you attempt to domesticate an Alabama corporation to Florida without an attorney.
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 an Alabama corporation to Florida securely, efficiently, and with everyone’s interests protected at every stage of the project.
Make Your Alabama C or S Corporation’s Domestication More Convenient and Secure with FL Patel Law PLLCTo top
Unless you have a lawyer’s assistance, then attempting to domesticate an Alabama corporation to Florida could even inadvertently lead to the end of your business itself. Hiring our corporate law firm can help avoid interruptions or other unwanted surprises when relocating an Alabama corporation to Florida.
What Are the Benefits of Domesticating an Alabama C or S Corporation to Florida?To top
1. Your C or S corporation won’t be required to file with the State of Alabama again if its nexus in that state is removed by its domestication to Florida.
2. As the owner of a Florida corporation, you can work with Florida professional accountants, attorneys, and other service providers who could be useful to your company’s future in its new state.
3. Hiring our corporate law firm to domesticate an Alabama corporation to Florida means that your company can have a smooth transition from state to state free from delays, interruptions, or other problems.
4. The Alabama corporation’s original formation documents will be immediately replaced by Florida Articles of Incorporation that are drafted and filed by our legal team on your behalf. This is an essential part of how your entity can keep the same corporate powers, rights, benefits, exemptions, privileges, and principles when you domesticate an Alabama corporation to Florida.
5. The number of shares issued to each shareholder as well as the value of those shares won’t be changed when you domesticate an Alabama corporation to Florida. Property rights like real estate also won’t be affected by the process, and will carry over along with any liabilities or lawsuits faced by the company. However, the Florida corporation’s name may be substituted in place of the Alabama entity’s name for any pending legal procedures or actions.
6. The business’s owners don’t need to live in Florida after they domesticate an Alabama corporation to Florida.
7. By becoming a Florida entity, it’s possible to remove your C or S corporation’s existing nexus in Alabama. As a result, it’s also possible that you will pay less in taxes issued at the state level. Talk to your tax professional about this, as tax implications will vary depending on multiple factors.
8. Because a properly domesticated C or S corporation is still the same business that it was in its previous state, there’s no need to get a new EIN after its relocation to Florida.
9. Another convenience offered to your business when you domesticate an Alabama corporation to Florida is that your company can still use the same bank accounts, taxpayer ID, operations, and contracts. However, this might not be the case without careful planning, research, and legal guidance, which is another reason why it’s important to secure the right legal counsel for your company’s relocation.
What Tax Implications Can I Expect if I Domesticate an Alabama Corporation to Florida?To top
Because of the various differences in tax laws between states, it’s important to get help preparing for the changes to you and your corporation’s tax responsibilities before trying to domesticate an Alabama corporation to Florida. However, our corporate law firm can only provide limited advice when it comes to these topics, so consulting with your chosen tax professional is essential to the relocation’s success, too. Some potential things to discuss with them might include:
- State Income Tax: Florida has no state income tax for either businesses or business owners. This is one of the most common ways that moving a company to Florida can save its owners money. Federal income tax responsibilities, however, will not be eliminated when you domesticate an Alabama corporation to Florida.
- Franchise Tax: Florida has no franchise tax for C or S corporations, either. After you domesticate an Alabama corporation to Florida, you should be sure to close out the company’s account with the Alabama Department of Revenue and file final returns if necessary.
- Nexus: Businesses must obey the tax laws of any state where they have established a taxable connection, which is also known as a nexus. This is true even after undergoing statutory conversion. Generally, this connection is made when the company has a physical presence, employees, or substantial activities in a given state.
Should I Hire FL Patel Law PLLC to Domesticate My Alabama C or S Corporation?To top
After we domesticate an Alabama corporation to Florida for one of our clients, we host a comprehensive final consultation with them to ensure that all of their questions and concerns have been fully addressed. They also receive a post-domestication checklist that has instructions to help them acclimate to their responsibilities as Florida business owners.
Remember that our corporate law firm provides a suite of services that could prove useful – if not necessary – to your company’s success. Attorney Patel’s advice and guidance can be a valuable resource for any number of business and legal matters because of his history as both a lawyer and an entrepreneur himself.
Moving your C or S corporation to Florida doesn’t have to be a stressful and dangerous undertaking. 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.
Ready to move from sweet home Alabama to sunny and beautiful 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 initial consultation through our online calendar.