Can You Domesticate a Michigan Corporation to Florida?

Can You Domesticate a Michigan Corporation to Florida?

Domesticating or Moving a Michigan Corporation to Florida

Florida’s growing reputation as a pro-business state has made relocating to the Sunshine State an attractive prospect for corporations across the country. It’s no surprise, then, that we get so many calls from prospective Clients interested in learning how they can make that happen. The option that we most like to recommend to eligible Clients is something called “domestication,” which is a process that alters the corporation’s formation state while keeping the rest of the business intact. LLCs interested in relocation should instead look into statutory conversion. If you’re interested in getting the ball rolling on your Michigan corporation’s domestication, then be sure to call our firm today.

Does Michigan Allow Corporations to Domesticate to Florida? 

Michigan corporations are allowed to domesticate to qualifying states such as Florida pursuant to Mich. Comp. Laws Ann. § 450.1745.

Sec. 745. (1) A domestic corporation may convert into a business organization if all of the following requirements are satisfied: 

What Happens to My Michigan Corporation During Domestication? 

Domestication is one of the better ways to relocate a Michigan corporation to Florida because it allows you to do so while maintaining its continuity. It provides a lot of advantages when compared with dissolving your original corporation and reincorporating in your new state, too. For one, you’ll be able to keep doing business while you wait for your filings to complete. The domesticated corporation will still be the same entity that existed in Michigan, complete with the same EIN (Federal Employer Identification Number and incorporation date. Property and contractual rights also carry over to the domesticated business. 

A quick word of warning: you might want to think of some alternative names for your business, because you won’t be able to use the original name if its already in use by a Florida entity. To find out for sure, we suggest running a name availability search on the Florida Division of Corporation’s website. 

What are the Effects of Domestication? 

In almost every circumstance, domesticating your Michigan corporation into a Florida corporation will have a minimal impact on your business aside from updating its formation state. The domesticated corporation will also be treated as if it had originally incorporated in Florida. Shareholder rights, including the right to acquire shares, will remain as they were, as will the value of the corporation’s shares, securities, and eligible interests. Obligations, similarly, will pass from the Michigan corporation to the Florida corporation, as will any lawsuits, liabilities, or other proceedings.

Does My Michigan Corporation Dissolve When It Domesticates to Florida? 

No, your Michigan corporation doesn’t dissolve during domestication. However, it will lose the ability to legally conduct business in its original state. If you want your Florida corporation to have a presence in any state other than Florida, you’ll need to file a Foreign Qualification in that location first. 

How Long Does It Take to Domesticate My Michigan Corporation to Florida? 

Most domestications for corporations without real estate are completed within four to twelve weeks. Of course, the exact time will depend on your business and its assets. Your attorney can give you a more precise estimate after conducting their review. 

How Do I Domesticate My Michigan C or S Corporation?

The first document that you need to draft to domesticate your Michigan C or S corporation to Florida is called a Plan of Conversion. As the name implies, it covers information relevant to the domestication. It should reference the authorizing statutes under both Michigan and Florida law, who owns what and how much in the company, anticipated tax consequences, and the transfer of rights and obligations. Then, once the Plan of Conversion has been approved of by the corporation’s directors, the remaining paperwork can be filed with the prescribed agencies in both states. 

Be careful and strictly follow the instructions in both the Florida and Washington 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 Corporation? 

Absolutely! Our firm has helped multiple business owners, consultants, and companies convert or domesticate to Florida. This experience means that we have a process on hand that helps ensure that your domestication occurs flawlessly. Our clients come from all across the United States and represent nearly every industry conceivable.

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 Michigan Corporations? 

Florida allows corporations from other states – such as Michigan – to domesticate so long as the other state also has statutes authorizing domestication. We like to suggest domestication to our clients because it helps ensure their corporation’s continuity. A full list of the conditions to meet and the procedures to follow can be found in Section 607.0101 of the Florida Business Corporation Act (FBCA). Review this section very carefully. Mistakes here could cause dissolution.

Is your Michigan corporation ready to relocate to sunny, tropical Florida? Don’t risk breaking your business’s stride– get assistance from an experienced business domestication attorney by calling(727) 279-5037, or if you are ready to move, you can schedule a consultation online.

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FL Patel Law PLLC is a boutique business law firm dedicated to entrepreneurs and companies.

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