Can You Domesticate an Iowa Corporation in Florida?

Can You Domesticate an Iowa Corporation in Florida?

Domesticating or Moving an Iowa C or S Corporation to Florida

More than ever, businesses from across America are looking to relocate to Florida, whether they’re interested in capitalizing on our state’s lack of a personal income tax on business owners, or whether they just want to enjoy one of the best climates that the country has to offer. There are many ways that you can relocate operations to the Sunshine State, but the methodology that we most like to recommend to qualifying corporate clients is known as domestication. This method allows eligible corporations to change their origin state (also known as their state of formation) while keeping their business in tact. A comparable process exists for LLCs, known as statutory conversion.

What Happens to My Iowa Corporation During Domestication?

Domestication is an ideal option for Iowa corporations looking to relocate to Florida because it protects your business’s continuity and is often preferable to the hassle of dissolving your original business and reincorporating in a new state. Your domesticated corporation will be the same business that you had in your previous jurisdiction, complete with the same EIN, incorporation date, and ownership structure. Real estate, contractual, or property rights held by the company likewise transfer over to domesticated entity. 

Some corporations that domesticate to Florida will need to find a new name for their business. However, this is only true for businesses who’s desired name is already taken by a Florida entity. To find out, you can perform a name availability check using the Division of Corporation’s website. 

What are the Effects of Domestication?

One of the reasons our firm is so enthusiastic about the domestication process is that it has a negligible impact on your business outside of altering its formation state. Ownership in the company will remain unaffected, and the rights of the shareholders, such as the right to acquire new shares, are preserved during the move by the Terms of Domestication, the Florida Articles of Incorporation, and the FBCA. Domestication won’t alter the value of the corporation’s stock, eligible interests, or securities, either. It’s important to know, however, that any debts, obligations, liabilities, and proceedings against your Iowa corporation will also follow it through the domestication process.

Does My Iowa Corporation Dissolve Upon Domesticating to Florida?

No. Instead of dissolving your business, domestication legally transfers it from one state to another. That said, the domesticated entity can only operate in Florida. If your company wants to have a presence outside of the Sunshine State, then it first needs to file for a Foreign Qualification with each applicable jurisdiction. 

How Long Will It Take to Domesticate My Business from Iowa to Florida?

Unless your Iowa corporation owns a significant amount of real estate, it can most likely domesticate to Florida within 4 to 12 weeks. 

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

Most corporate domestications begin with a Plan of Domestication. This Plan is a formal document that should include information pertinent to the move and anything else called for under Iowa or Florida domestication law. At a minimum, you’ll want to include the authorizing statutes from each state, a breakdown of the company’s ownership structure, a transfer of rights and obligations, any expected tax consequences that might result from the move, and any necessary supplementary documents. The Plan then needs to be signed off on by the Directors and Shareholders, at which point you’ll be ready to file the remaining paperwork with each state. 

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

Should I Use FL Patel Law PLLC to Domesticate My Iowa Corporation? 

Yes! Our experience relocating businesses to Florida means that we have a refined process on hand that helps ensure that your Iowa corporation can domesticate without any issues or major headaches. We educate our clients and keep them updated every step of the way. We can even provide additional legal support and guidance in operating your corporation in Florida as well. Our clients come from every industry across the country, from consultants to e-commerce businesses, start-ups, and more.

Corporate transactions often come with legal and tax implications. Mistakes during the domestication process could cause you to lose liability protection, discourage potential investors, or even the liquidation of your company. It’s always worth the effort to find a qualified lawyer to assist you.

Does Florida Permit the Domestication of Iowa Corporations?

Florida allows corporations formed in other states to domesticate if the other state has its own laws authorizing the move. We like to suggest domestication to our clients because it helps ensure their corporation’s continuity. A full list of the conditions 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 Iowa Allow Corporations to Domesticate to Florida?

Yes, under Iowa Code Ann. § 490.1111.

1. An other entity may convert to a domestic corporation, and a domestic corporation may convert to an other entity pursuant to this section and sections 490.1112 through 490.1114 and a plan of conversion, if all of the following apply: 

a. The other entity’s governing statute authorizes the conversion. 

b. The conversion is not prohibited by the law of the jurisdiction that enacted the governing statute. 

c. The other entity complies with its governing statute in effecting the conversion. 

Iowa Code Ann. § 490.1111

Is your Iowa corporation ready for its next chapter in tropical Florida? Call(727) 279-5037 to speak with our corporate attorney or visit our consultation page to learn more about our domestication services.

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