Can You Domesticate a Maryland Corporation to Florida?
Domesticating or Moving a Maryland C or S Corporation to Florida
Florida is well known as a pro-business state, which means that it’s no surprise that entrepreneurs from all over are interested in learning about how they can relocate their operations to the Sunshine State. There may be multiple options available depending on your business and its formation state. The methodology that our firm likes to suggest to qualifying corporate clients looking to move to Florida is called domestication.
What Happens to My Maryland Corporation During Domestication?
Much like statutory conversions for LLCs, domestications legally change a corporation’s origin state from one jurisdiction to another. This preserves its continuity. This means that the domesticated business is the same entity that existed in the previous origin state, complete with the same EIN, incorporation date, and ownership structure. The corporation retains its property, contractual, and real estate rights, too. When domesticating to Florida, your Maryland corporation will likely be able to keep operating under the same name, but this will not be the case if that name is already taken by a Florida entity. You can check the availability of your corporation’s name by searching the Florida Division of Corporation’s database.
What are the Effects of Domestication?
Domestication is great because it allows you to move your Maryland corporation to Florida without major interruptions or changes. It also does away with any need to dissolve your business and reincorporate from scratch. Along with the business itself, shareholder rights, along with the value of the corporation’s stock, securities, and eligible interests, are preserved by the Terms of Domestication, Florida Articles of Incorporation, and the FBCA. Debts, liabilities, obligations, lawsuits, and other proceedings against the Utah business will also carry over to the domesticated Florida entity.
Does My Maryland Corporation Dissolve When Domesticating to Florida?
No, your business will remain intact throughout the entirety of the domestication process. However, domesticated corporations cannot do business outside of their new origin state without filing for a Foreign Qualification in those locations first.
How Long Does It Take to Relocate My Business from Maryland to Florida?
Corporations without real estate can expect their Florida domestications to take between four and twelve weeks to process. Otherwise, you’ll need to wait for your attorney to review your business and its assets before the timeline can be assessed.
How Do I Domesticate My Maryland C or S Corporation to Florida?
In order to domesticate your Maryland corporation to Florida, you or your attorney first need to draft a Plan of Domestication. This document needs to cover the statutes permitting the domestication, expected tax consequences, the company’s ownership structure, the transfer of rights and obligations, and anything else called for by the laws of both states. The Plan of Domestication then needs to be presented to the Directors and Shareholders for their approval. Once they’ve signed off, you can file the remaining paperwork necessary to domesticate your business.
Should I Use FL Patel Law PLLC to Domesticate My Maryland Corporation?
Yes! Working with our firm to domesticate your business grants you access to a wealth of knowledge and confidence in the process that only an experienced firm such as our own can offer. 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.
Does Florida Permit the Domestication of Maryland Corporations?
Florida law allows corporations from other states to domesticate into Florida corporations whenever the business’s origin or formation state has reciprocal authorizing statutes. Domestication is advantageous because it preserves the 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 Maryland Allow Corporations to Domesticate to Florida?
Yes, Maryland corporations can domesticate out of state in accordance with Section 3-901 of the Maryland Code.
(a) In this subtitle, “other entity” means:
(1) A foreign corporation, as defined in § 1-101 of this article;
(2) A domestic limited liability company, as defined in § 4A-101 of this article;
(3) A foreign limited liability company, as defined in § 4A-101 of this article;
(4) A partnership, as defined in § 9A-101 of this article;
(5) A limited partnership, as defined in § 10-101 of this article, including a limited partnership registered as a limited liability limited partnership under § 10-805 of this article;
(6) A foreign limited partnership, as defined in § 10-101 of this article;
(7) A business trust, as defined in § 1-101 of this article; or
(8) Another form of unincorporated business formed under the laws of this State or the laws of the United States, another state of the United States, a territory, possession, or district of the United States, or a foreign country. Conversion of corporation to other entity
(b) Unless the charter provides otherwise, a Maryland corporation may convert to an other entity by:
(1) Approving the conversion in accordance with § 3-902 of this subtitle; and
(2) Filing for record with the Department articles of conversion executed in the manner required by Title 1 of this article.Md. Code Ann., Corps. & Ass’ns § 3-901
Our firm prides itself on its client-centered focus. We take the time to learn everything we can about your corporation and your plans for its future when domesticating your business. This way, you don’t have to worry about dissolution or other headaches along the way. Call us at (727) 279-5037 or visit our consultation page today.
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