How an Attorney can Help Convert or Domesticate an Illinois Corporation to Florida

Relocate, Transfer, Convert, or Domesticate an Illinois Corporation to Florida

Updated: June 24, 2024
Reading Time: 10 Minutes

Objectives:

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

Entities:

• Illinois C Corporations
• Illinois S Corporations

Table of Contents

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

Florida’s pro-business laws and the fact that we don’t have a state income tax make us an attractive location for companies looking for a new home. C and S corporations looking to make this type of move can do so by using a process known as domestication.

Domesticating a company to a new state presents many opportunities for things to go wrong, especially without someone to help you navigate the different laws and regulations involved. 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 Illinois corporation to Florida

This article will review the process that our corporate law firm uses to domesticate an Illinois corporation to Florida, as well as some details about the many benefits that working with us can bring to both you and your company. It also has some important warnings of what can go wrong when you attempt a project like this on your own.

Both you and your business are put in unnecessary danger if you try to domesticate an Illinois corporation to Florida without an attorney’s help. Depending on what goes wrong, you might even accidentally liquidate your Illinois C or S corporation. Our firm will help you safely navigate each stage of the process, and can apply our knowledge to everything from helping keep your company in compliance to protecting its corporate identity, and much more.

Domestication is a legal procedure for changing a C or S corporation’s formation state without sacrificing its continuity or corporate identity.

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 presents a great alternative to dissolving a business and reincorporating it all over again in a new state, which helps protect important relationships, contracts, and licenses. The process automatically transfers the business’s licenses, rights, assets, privileges, and liabilities from its previous state over to the domesticated entity as well.

The Florida Business Corporation Act (FBCA) will replace the Illinois Business Corporation Act (IBCA) as your C or S corporation’s governing law unless your company has a foreign qualification or still has a taxable nexus back in Illinois. In that case, both laws will apply to your entity. Be sure to talk to our attorney about this during your consultation.

Yes, Illinois corporations can become Florida business entities through domestication according to Section 301 of the Illinois Compiled Statutes. Illinois LLCs have a similar process available to them known as statutory conversion.

No, your Illinois C or S corporation will continue to exist as the same entity after domesticating to Florida. At no point during the process will it be dissolved, nor should it be, as this would be counterproductive to protecting the business’s continuity. Avoid any instructions you find stating otherwise, as they clearly don’t know what they’re talking about. Dissolution should only be pursued when you’re ready to liquidate your company. It is not required to domesticate an Illinois corporation to Florida.

The Internal Revenue Service (IRS) – the agency responsible for issuing your company’s EIN – decides this on a case-by-case basis. In most cases, they allow converted and domesticated entities to keep using their original EIN as long as no changes are made to the business’s corporate identity. Its continuity can’t be interrupted during the move, either.

Every state that allows domestications has its own specific process for doing so, but all share some common steps. What follows is a general outline and should not be treated as advice or instructions on how to domesticate an Illinois corporation to Florida. For guidance related to your business’s unique needs, schedule a consultation with our corporate attorney now.

The first step we take to domesticate an Illinois corporation to Florida is to thoroughly review the client’s business. Doing this helps us make sure that the entity is eligible for domestication. It also gives us what we need to know in order to develop a personalized plan for relocating the business that prevents potential issues before they can become major problems.

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

• Drafting all documents required to domesticate an Illinois corporation to Florida, including the Plan of Domestication;
• Ensuring compliance with the laws, regulations, and other legal requirements present in both Illinois and Florida;
• Handling all filings and correspondence with Illinois 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 can complete a conversion or domestication to Florida in about two or three months. This is the fastest timeline available for this kind of move, and such dedication and efficiency can only be found in legal teams with our degree of experience.

Because the state agencies that process domestication and conversion documents often face back logs and other delays, even small mistakes with your paperwork could set your relocation back significantly. Getting things right on the first attempt is essential when trying to domesticate an Illinois corporation to Florida, and no one is going to be a better asset for you in that goal as a lawyer can be.

In order to domesticate an Illinois corporation to Florida, you can expect to pay at least $228.75 in filing fees alone ($100.00 for Illinois and $128.75 for Florida). That number can grow a lot bigger if you need to correct any documents, as many states don’t offer refunds for this type of paperwork. This is one of the many areas where working with an attorney can help save your company money on its relocation.

Our flat fees for domestications and conversions make it easier for clients to set their budgets for these types of projects while lowering the risk of unexpected costs. These fees are based on the client’s company and their own unique needs. Schedule an initial consultation with our corporate attorney now to review and get a quote for your domestication or conversion project.

To successfully domesticate an Illinois corporation to Florida, the person – or preferably, legal team – in charge needs to have a thorough understanding of the law in both states in addition to several other niche skills. 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 for this type of transition.

Trying to domesticate an Illinois corporation to Florida without an attorney’s resources and guidance can result in:

• Noncompliance with state laws
• Revocation of the Illinois 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.

Keep in mind that this list is not exhaustive, and that there are still more problems that can arise if something goes wrong when trying to domesticate an Illinois corporation to Florida without a law firm’s help.

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 Illinois corporation to Florida securely, efficiently, and with everyone’s interests protected throughout the course of the project.

Trying to domesticate an Illinois corporation to Florida without an attorney’s assistance can place both the business and its owners in great jeopardy – legally, financially, and otherwise. Hiring our law firm is the best way to set your company up for a smooth, successful transition to Florida.

1. Domesticating your company to Florida means that your C or S corporation doesn’t need to file with the State of Illinois ever again as long as its nexus in that state is removed, too.

2. After you domesticate an Illinois corporation to Florida, you can team up with Florida professional accountants, attorneys, and other service providers who can help take your business to the next level.

3. One of the most appreciated things about domesticating a corporation is that it enables a smooth transition to Florida without interruptions or delays.

4. Florida Articles of Incorporation will immediately replace your C or S corporation’s original incorporation documents. This will allow you to continue benefiting from all of your company’s original corporate powers, rights, benefits, exemptions, privileges, and principles after domesticating to Florida.

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

6. The corporation’s shareholders don’t need to live in Florida after their company has been domesticated.

7. You might be able to reduce what your company pays in taxes at the state level by domesticating your C or S corporation to Florida. However, doing this typically requires eliminating any nexus or taxable connection to its previous domicile.

8. Your company can continue using the same EIN when reporting taxes that it was issued in Illinois after domesticating to Florida. Talk to your tax professional about this, as tax implications will vary from business to business.

9. When we domesticate an Illinois corporation to Florida, our clients are able 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, or legal guidance.

Because tax laws can vary wildly from state to state, moving your company will probably come with tax implications that you’ll need to stay on top of. A tax professional’s guidance is essential for this, as our legal team can only provide generalized information for such matters. Some potential items to bring up when speaking with them include:

• State Income Tax: Florida’s lack of a state income tax is one of the most attractive features of the Sunshine State among business owners and entrepreneurs. This is just one area where you might be able to save money when you domesticate an Illinois corporation to Florida.

• Franchise Tax: Yet another tax that business owners can liberate themselves from by relocating to Florida is franchise tax. Your C or S corporation will need to close its account with the Illinois Department of Revenue and file final returns if required.

• Nexus: A nexus is a taxable connection between a business and a specific state. This connection can be created by having substantial activities, a physical presence, or employees in that state. If this connection exists for your corporation, then it will still need to abide by Illinois tax law after domesticating.

Hiring our firm to domesticate an Illinois corporation on your behalf allows you to benefit in numerous ways both during and after your business’s relocation. Remember that, 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 corporation’s move is complete, our clients will meet with our corporate attorney to address any remaining questions or concerns. During this consultation, they also receive a helpful checklist containing instructions to help them adapt to their new lives as Florida business owners.

Attempting to domesticate an Illinois corporation to Florida without legal guidance can end in many different kinds of disaster. 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 domesticate an Illinois corporation down to the Sunshine State? Don’t risk breaking your business’s stride — get assistance from an experienced business conversion and domestication attorney by calling (727) 279-5037 or by scheduling a time with us using our online calendar.

Image by Luis Leon from Pexels.