Can You Relocate or Convert a Hawaii LLC to a Florida LLC?
Relocating, Domiciling, Transferring, or Converting a Hawaii LLC to a Florida LLC
Updated: September 10, 2023
Reading Time: 10 Minutes
- Domicile a Hawaii Limited Liability Company (LLC) to Florida;
- Maintain the same EIN and identity of the LLC; and
- Enjoy tax benefits provided to Florida residents.
- Hawaii Limited Liability Companies (LLCs)
Table of Contents
- What is a Conversion or a Domestication?
- Does Hawaii Allow LLCs to Move Out of State?
- Is My Hawaii Entity Dissolved?
- Do I Need To Get a New EIN if I Domesticate My Company to Florida?
- How Does FL Patel Law PLLC Convert My Hawaii LLC to a Florida LLC?
- How Long Does It Take To Complete a Domestication or Conversion to the State of Florida?
- What Are the Costs Involved in Domesticating My Hawaii LLC to the State of Florida?
- What Are Some of the Risks Associated With a Conversion Gone Wrong?
- Increase Your Chances of a Successful Conversion
- What Are the Benefits of Converting My Hawaii LLC to a Florida LLC?
- What Are the Tax Implications of Converting My Hawaii LLC to a Florida LLC?
- Should I Work With Attorney Patel to Convert My California LLC to a Florida LLC?
Moving an LLC from Hawaii to Florida can be highly beneficial for both the company and its members. After all, our state has many pro-business policies designed to make life easier for business owners, such as the fact that Florida doesn’t issue a state income tax. Those interested in moving their operations to our state to take advantage of these policies can often do so using a legal process called statutory conversion.
Converting a Hawaii LLC to a Florida LLC can be intimidating even for the most experienced business owners, but FL Patel Law PLLC’s guidance can make all the difference and help ensure a seamless transition. Our firm has successfully reorganized over 140 businesses into Florida entities, providing us with the necessary insight to prepare them for success in their new state.
This page will tell you more about how working with our firm to convert a Hawaii LLC to a Florida LLC can help minimize your company’s expenses during this transition and prevent other potential problems as well. Be sure to keep reading, as it also has some important warnings about the dangers that your LLC and its members can be exposed to if you attempt to move your company across state lines without an attorney’s oversight.
The damage caused by an improperly handled conversion can have long lasting consequences for both the LLC and its owners. In fact, certain mistakes could even lead to the business’s liquidation. Our legal team’s assistance with navigating this process won’t just make for a more convenient transition – it’s a major part of making its relocation as secure as possible, too.
What is a Conversion or a Domestication?To top
Statutory conversion can be used to change a Hawaii LLC to a Florida LLC by legally updating its formation state.
This process is often referred to as “domestication,” “conversion,” or “transfer” when the entity is converting to a different state. These terms can often be used interchangeably.
Your LLC’s continuity and corporate identity will be protected while converting from a Hawaii entity to a Florida entity. This means that it will be considered to be the same entity both before and after its relocation, which helps maintain important relationships, contracts, and licenses. The Hawaii LLC’s rights, assets, privileges, and liabilities will also transfer over automatically to the converted Florida LLC.
The Florida Revised Limited Liability Company Act will start to regulate your entity once its transition is complete. Be aware that the Hawaii Uniform Limited Liability Company Act could continue to apply to your Florida entity under certain circumstances. Such circumstances include having a foreign qualification or nexus (taxable connection) in Hawaii after converting the business from a Hawaii LLC to a Florida LLC.
Does Hawaii Allow Limited Liability Companies (LLCs) to Move Out of State?To top
Hawaii LLCs can become Florida LLCs by using statutory conversion according to Section 428-902.5 of the Hawaii Revised Statutes. Corporations can use a similar process called domestication to become Florida entities as well.
Section 428-902.5 – Conversion into and from limited liability companies
(a) A domestic limited liability company may adopt a plan of conversion and convert to a foreign limited liability company or any other entity if:
(1) The domestic limited liability company acts on and its members approve a plan of conversion in the manner prescribed by sections 428-904 to 428-906 and the conversion is treated as a merger to which the converting entity is a party and not the surviving entity;
(2) The conversion is permitted by, and complies with, the laws of the state or country in which the converted entity is to be incorporated, formed, or organized; and the incorporation, formation, or organization of the converted entity complies with such laws;
(3) At the time the conversion becomes effective, each member of the converting entity, unless otherwise agreed to by that member, owns an equity interest or other ownership interest in, and is a shareholder, partner, member, owner, or other security holder of, the converted entity;
(4) The members of the domestic limited liability company shall not, as a result of the conversion, become personally liable without the members’ consent, for the liabilities or obligations of the converted entity; and
(5) The converted entity is incorporated, formed, or organized as part of or pursuant to the plan of conversion.
Is My Hawaii Entity Dissolved?To top
Using statutory conversion to change your Hawaii LLC to a Florida LLC won’t dissolve your entity unless mistakes are made during its execution. This is another reason a law firm’s help with this transition is so important, as an attorney’s oversight can prevent the kinds of errors that could inadvertently end your company. Dissolution isn’t necessary to relocate a company, either, regardless of what some incorrect sources online may say.
After its conversion is complete, the LLC will be listed as “Withdrawn” in Hawaii’s online business entity search database, assuming that everything was handled correctly.
Do I Need To Get a New EIN if I Domesticate My Company to Florida?To top
While this will be decided on a case-by-case basis by the Internal Revenue Service (IRS), working with an attorney can help ensure that your company satisfies their requirements for keeping the same EIN. Perhaps most importantly, the IRS must consider the business to be the same entity both before and after its conversion from a Hawaii LLC to a Florida LLC. For this to be the case, the LLC’s continuity can’t be interrupted during its move and no changes can be made to its identity besides its updated domicile.
How Does FL Patel Law PLLC Convert My Hawaii LLC to a Florida LLC?To top
All statutory conversions share the same core steps, but each relocation has its own unique requirements depending on factors specific to the business in question. Here, we’ll give an overview of our process for relocating a business to Florida from out of state. These are not instructions on how you can convert a Hawaii LLC to a Florida LLC. For that kind of guidance, schedule your initial consultation with us now.
When hired to convert a Hawaii LLC to a Florida LLC, we start by hosting an initial consultation with the client and conducting a thorough review of their business. Once we’ve confirmed that the entity qualifies for statutory conversion, we use the information we’ve gathered to draft a plan for relocating the business to Florida while keeping its continuity and identity intact.
Some of the many benefits and conveniences offered by our firm’s conversion and domestication services include:
- Drafting the Plan of Conversion and other required documents for converting the Hawaii LLC to a Florida LLC
- Ensuring compliance with the laws and other legal requirements in both states
- Filing the necessary documents with Hawaii and Florida state agencies
- Updating the LLC’s operating agreement and other corporate documents to reflect its conversion from a Hawaii LLC to a Florida LLC
- A comprehensive consultation to address final concerns and questions
How Long Does It Take To Complete a Domestication or Conversion to the State of Florida?To top
Because of our law firm’s extensive experience with these types of transitions, we’re able to convert a Hawaii LLC to a Florida LLC as quickly as possible. For most businesses, this will take about two or three months. However, more time might be required depending on the size of the LLC and its assets.
State agencies in both Hawaii and Florida will need at least several weeks to process your conversion paperwork, and these agencies sometimes face delays of their own. Because of this, your company’s transition from a Hawaii LLC to a Florida LLC could be significantly delayed by even small mistakes made with your filings. Working with a law firm like ours is the best way to ensure that every part of your LLC’s conversion is done right the first time around.
What Are the Costs Involved in Domesticating My Hawaii LLC to the State of Florida?To top
Hawaii’s filing fee for conversion paperwork is $100.00 and Florida’s fee is $155.00, so it’s going to cost $255.00 just to have your initial documents processed. Beware that even simple mistakes made when converting a Hawaii LLC to a Florida LLC have the potential to drive these costs astronomically higher. Not only do you need to worry about repeat filing fees – the repercussions of accidentally breaking the company’s continuity, for example, has the potential to devastate its bottom line.
We give flat fees to our LLC conversion clients, which helps prevent unexpected expenses and minimize costs. These fees are based on the specific demands of the relocation. Schedule your initial consultation with us now to get a quote for converting a Hawaii LLC to a Florida LLC.
What Are Some of the Risks Associated With a Conversion Gone Wrong?To top
Lacking an attorney’s help when relocating a business across state lines can have severe and long lasting implications for both the LLC and its members. With our law firm managing your entity’s conversion from a Hawaii LLC to a Florida LLC, you’ll be backed by a legal team that knows how to prevent the kinds of costly mistakes that can threaten the future of your business.
The dangers of trying to convert a Hawaii LLC to a Florida LLC without reliable legal guidance include:
- Noncompliance with state laws
- Revocation of the LLC’s operating authority
- Damaged credit standing
- Damaged relationships with clients and vendors
- Disrupted contracts
- Loss of business continuity
- Loss of limited liability protection
- Tax implications and increased tax liabilities
- Legal disputes
- Dissolution or liquidation
- Missed opportunities
- Expensive fines
- Painful delays
- Taxes on Appreciated Assets – Depending on the LLC’s tax structure, its members could end up paying income taxes on appreciated assets if they make any errors during the conversion process. For instance, if an asset that was worth $100,000 at the company’s founding is now worth $1 million, and the company is mistakenly dissolved or liquidated, then the members could be taxed on the gained value.
- Title of Asset Issues – Another benefit of converting a Hawaii LLC to a Florida LLC is that asset titles will automatically transfer over to the domesticated entity – that is, assuming the conversion process was handled correctly. This can make it difficult to prove ownership of those assets, which can cause major headaches when trying to sell a company, among other problems.
That list might look long, but these are only some of the risks of undertaking a project like this on your own.
With over 140 business conversions and domestications to our credit, our firm’s proven track record means that you can rest easier knowing that your interests are in safe hands when we’re the ones in charge of converting your Hawaii LLC to a Florida LLC.
Increase Your Chances of a Successful ConversionTo top
Moving a company across state lines presents many opportunities for things to go wrong both for the LLC and its members. With our law firm as your ally, you can move forward with confidence knowing that your business is backed by the expertise and skills needed to convert a Hawaii LLC to a Florida LLC.
What Are the Benefits of Converting My Hawaii LLC to a Florida LLC?To top
1. Unless your LLC still has a nexus in Hawaii after its conversion, there will be no need to file with the State of Hawaii after the business becomes a Florida entity.
2. As a Florida LLC owner, you can work with Florida professional accountants, attorneys, and other useful service providers.
3. A converting LLC can continue doing business during its relocation, as this process enables a seamless transition from a Hawaii LLC to a Florida LLC without interruptions or delays.
4. The Hawaii LLC’s original formation documents will be immediately replaced by Florida Articles of Organization, which helps protect its continuity. This is a part of ensuring that your Florida LLC will be able to continue to benefit from the same powers, rights, benefits, exemptions, privileges, and principles that it did as a Hawaii LLC.
5. Membership interest in the company will be unaffected by changing it from a Hawaii LLC to a Florida LLC. The business’s property rights, such as real estate, will automatically transfer over during this process as well. However, make note that any liabilities of the LLC will remain unaffected by the Florida conversion, as will any lawsuits. Any pending legal procedures or actions can be substituted with the name of the Florida LLC.
6. The LLC’s members are not required to live in Florida after converting a Hawaii LLC to a Florida LLC.
7. The converted Florida entity won’t need to have a nexus (taxable connection) in Hawaii after its relocation is complete. If this is the case, then your company could lower what it has to pay for state taxes. Talk to your tax professional about this, as every business’s circumstances will be different.
8. Conversion won’t require obtaining a new EIN for the LLC, as it will be considered the same business both before and after it undergoes this process. Only its official formation state will be changed.
9. Another major convenience of converting your LLC is that your business can continue using the same bank accounts, the same taxpayer ID, the same operations, and the same contracts in Florida that it used in Hawaii. Careful planning and legal guidance should be undertaken to help ensure that this is the case, however.
What Are the Tax Implications of Converting My Hawaii LLC to a Florida LLC?To top
Florida issues fewer taxes on both businesses and individuals when compared to many other states, which is a big reason that so many LLCs and corporations have relocated here in recent years. However, the tax implications of converting a Hawaii LLC to a Florida LLC will be different for every business, so you need to consult with your tax professional about this project because our firm can only offer limited advice in these areas. Some things to bring up with your chosen tax professional could include:
- State Income Tax: As you might already know, Florida has no state income tax unlike Hawaii. While federal responsibilities will persist, this is one way that business owners can save money by converting from a Hawaii LLC to a Florida LLC.
- Franchise Tax: Franchise tax isn’t issued by the State of Florida, either. After converting from a Hawaii LLC to a Florida LLC, the company should close its account with the Hawaii Department of Taxation and file final returns if necessary.
- Nexus: Even after changing from a Hawaii LLC to a Florida LLC, your company could still have to follow Hawaii tax laws if it continues to have a nexus there after its conversion. Nexus is a company’s taxable connection to a certain state, and it’s generally established when the business has a physical location, employees, or otherwise engages in substantial activities in that jurisdiction.
Should I Work With Attorney Patel to Convert My Hawaii LLC to a Florida LLC?To top
At the end of our conversion and domestication projects, Attorney Patel hosts a comprehensive meeting to address any questions that the client might still have about their company’s relocation. We also provide them with an instructive checklist to help them adapt to their company’s transition to Florida.
Attorney Patel’s guidance can be especially helpful when converting a Hawaii LLC to a Florida LLC, as his experience as both a lawyer and entrepreneur give him a unique perspective and level of insight into transitions of this nature. Our law firm is also fully equipped to support your business after its conversion in any number of ways, as our corporate services are designed to make life easier for business owners in any way that we possibly can.
Attempting to relocate a Hawaii LLC to a Florida LLC places the business’s future – and the interests of its members – at unnecessary risk. By trusting your conversion to our Florida corporate law attorney, you’ll have more time and energy to focus on running your business while we tackle the legal complexities of its relocation. Schedule with us and get started today.
Ready to embrace your business’s next chapter by changing your Hawaii LLC to a Florida LLC? Don’t risk your business’s continuity – enlist the help of an experienced business relocation attorney by calling (727) 279-5037 or by scheduling a time through our online calendar.