Can You Domesticate an Arkansas Corporation in Florida?

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

Updated: February 11, 2023
Reading Time: 10 Minutes

Objectives:

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

Entities:

• Arkansas Corporations

Table of Contents

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

With low state taxes and a wide variety of pro-business policies, Florida has a lot to offer corporations from states like Arkansas that are looking for a new home. This type of move can be made by using a type of corporate transaction known as “domestication.”

There are many ways that trying to domesticate an Arkansas corporation to Florida can go wrong for first-timers. 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 lay out the steps we take to domesticate an Arkansas corporation to Florida, plus how our refined process can save you time and money along the way. It also has some important warnings about what can happen if you attempt this project without an attorney’s assistance and how we can help avoid unnecessary risks.

There are many opportunities for mistakes to be made when moving a business across state lines. You could even accidentally dissolve your Arkansas corporation depending on what goes wrong. Our firm will help you safely navigate each stage of the process, and we can apply our knowledge to everything from helping keep your company in compliance to protecting its corporate identity, and much more.

Domestication is a process that corporations can use to legally change their state of incorporation.

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.

When you domesticate an Arkansas corporation to Florida, you’re able to relocate your company without giving up its corporate identity. It doesn’t interrupt the company’s continuity or its ability to do business, either. This means that the domesticated Florida entity can keep the same contracts, relationships, licenses, rights, assets, privileges, and liabilities that it had as an Arkansas corporation.

The Florida Business Corporation Act (FBCA) will take over as your corporation’s governing law once it has become a Florida entity. While this won’t be true for all businesses, there are some situations where the Arkansas Business Corporation Act (ABCA) could continue to apply to your company after its domestication, such as if it has a foreign qualification or nexus in Arkansas. You should talk to our corporate attorney about this during your initial consultation.

Yes, Section 4-27-1102 of the Arkansas Code Annotated allows corporations to domesticate to other states that have reciprocal laws authorizing this type of transfer. Arkansas LLCs have a similar process known as statutory conversion that they can use to become Florida LLCs, too.

No, your original company won’t be dissolved when you domesticate an Arkansas corporation to Florida unless you make a mistake with your filings. You should also ignore any instructions online that tell you to dissolve your entity as a part of its domestication, as it isn’t a necessary part of the process, either. Dissolution should only be initiated when you’re ready to close your company forever.

This is decided by the Internal Revenue Service (IRS) based on the circumstances of your company’s move. A private letter is issued by the IRS informing the company of their decision once they have made their determination. In most cases, businesses can keep using the same EIN as long as their continuity isn’t broken during their relocation. Ensuring this continuity of identity is essential if you want to keep using the same EIN after you domesticate an Arkansas corporation to Florida.

While all domestications have their own unique requirements and conditions, our corporate law firm has developed a process that addresses the steps that they all have in common to help speed things along. Below you can find an overview of that process – keep in mind that these are not, however, instructions to domesticate an Arkansas corporation to Florida. For guidance from a proven corporate attorney, schedule your initial consultation with us now.

Moving a business to Florida with our firm begins with an initial consultation and a review of the client’s business that confirms its eligibility for domestication. It also gives us an added level of insight that’s integral for the project’s success and developing a custom Plan of Domestication.

The comprehensive support that you can enjoy by hiring our firm to domesticate an Arkansas corporation to Florida includes:

• Drafting all documents required to domesticate an Arkansas corporation to Florida, including the Plan of Domestication;
• Ensuring compliance with the laws, regulations, and other legal requirements present in both Arkansas and Florida;
• Handling all filings and correspondence with Arkansas 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 wealth of experience means that we can domesticate an Arkansas corporation to Florida as quickly as possible. Under most conditions, this comes out to about two or three months. That said, more time might be necessary depending on the size of the business and its assets.

This timeline is mostly spent waiting on agencies in each state to process the necessary documents. Each state agency will need a minimum of several weeks, so it’s vital that everything is accurate with your initial filings. Otherwise, your company’s domestication could face significant delays.

On top of the other costs that come with moving a business halfway across the country, you’ll also need to pay filing fees to domesticate your entity. Each state gets to set their own filing fee. Arkansas charges $50.00 and Florida charges $128.75, so it’s going to cost you at least $178.75 just to have your paperwork processed. Be mindful that mistakes will only result in higher overall costs.

Thanks to the flat fees that our firm provides for all domestication and conversion projects, there’s no need to worry about unexpected expenses when working with our firm to domesticate an Arkansas corporation to Florida. This is just one of the many ways that we help our clients save money. Schedule your initial consultation with Attorney Patel now.

Avoiding all of the various dangers that can come about when you domesticate an Arkansas corporation to Florida requires a high level of attention and expertise. By working with our corporate law firm, you can move forward confident that your company is equipped with everything that it needs for a successful relocation.

Some examples of things that can go wrong due to a mismanaged corporate domestication include:

• Noncompliance with state laws
• Revocation of the Arkansas 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 comprehensive list of the potential issues that you could encounter if you try to domesticate an Arkansas corporation to Florida without an attorney’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 Arkansas corporation to Florida securely, efficiently, and with everyone’s interests protected at every stage of the project.

There’s no guarantee that your company’s relocation will be successful if you don’t have a lawyer around to help you navigate its various legal complications. Hiring our firm can help avoid interruptions or other unwanted surprises when you domesticate an Arkansas corporation to Florida. Working with us isn’t just a massive convenience – it’s foundational to securing the overall success of the project, too.

1. You don’t need to stress over filing with the State of Arkansas again if your company’s domestication removes its nexus (taxable connection) in its original state of incorporation.

2. You can network with Florida professional accountants, attorneys, and other service providers after you become a Florida business owner yourself.

3. There won’t be any interruptions or delays during your company’s transition when you hire our experienced legal team to domesticate an Arkansas corporation to Florida.

4. Your company’s original incorporation documents will be seamlessly replaced by Florida incorporation documents drafted by our firm. Your company will also retain 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 be impacted when we domesticate an Arkansas 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 Arkansas entity’s name for any pending legal procedures or actions.

6. The shareholders don’t need to be Florida residents in order to domesticate an Arkansas corporation to our state.

7. You don’t need to have a nexus (taxable connection) in Arkansas after you domesticate your business to Florida. This could reduce what you pay in state income taxes. Talk to your tax professional about this, as tax implications will vary from business to business.

8. You don’t need to get a new EIN for your business after you domesticate an Arkansas corporation to Florida. Because only its domicile has changed, it’s still considered to be the same entity that existed previously, and will continue reporting taxes as before.

9. Domestication also allows your corporation 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, and legal guidance.

Preparing for the tax changes that will come with your company’s move is just as important as preparing for its legal challenges. Be sure to bring a tax professional on board for assistance with this, as our legal team will only be able to provide general information. A few things to consider bringing up with them could include:

• State Income Tax: As we mentioned above, Florida has no state income tax. While federal responsibilities will still remain, this is one way that you could save money when you domesticate an Arkansas corporation to Florida.

• Franchise Tax: Another tax that your corporation had to pay to the State of Arkansas that it won’t need to pay to the State of Florida is franchise tax. The company will need to close its account with the Arkansas Secretary of State and file final returns if necessary.

• Nexus: A nexus is a business’s taxable connection to a particular state. This connection can be created by having a physical presence, employees, or otherwise engaging in substantial activities in that jurisdiction. If your corporation still has a nexus in Arkansas after moving, then it will need to follow tax laws in both states.

In addition to the peace of mind and security that comes with hiring our firm to domesticate an Arkansas corporation to Florida, Attorney’s Patel’s guidance and advice on both legal and business matters can make all the difference when it comes to setting up a company for success in a new state. As a corporate law firm, we also provide a full suite of services that are essential to running a business in Florida.

A final consultation is held after the domestication is complete so that our corporate attorney can answer any remaining questions. During this consultation, the client also receives a useful checklist containing instructions to help them adapt to their new lives as Florida business owner.

Your company deserves the added level of protection that can only be achieved by working with a law firm when you domesticate an Arkansas corporation to Florida. 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.

Our firm is ready to help domesticate your Arkansas corporation to Florida. Don’t risk breaking your business’s stride — get assistance from an experienced business domestication attorney by scheduling a time through our online calendar or by calling (727) 279-5037.

Image by Enrique Ramos Lopez from Canva.com.