What to Know Before Converting or Merging a Massachusetts LLC into a Florida LLC

Relocating, Domiciling, Transferring, Converting, or Merging a Massachusetts LLC into a Florida LLC

Updated: June 19, 2023
Reading Time: 10 Minutes

Objective:

• Domicile a Massachusetts Limited Liability Company (LLC) to Florida;
• Maintain the same EIN and identity of the LLC;
• Enjoy tax benefits provided to Florida residents.

Entities:

• Massachusetts Limited Liability Companies (LLCs)

Table of Contents

• What is a Conversion, Merger, or Domestication?
• Does Massachusetts Allow LLCs to Move Out of State?
• Is My Massachusetts Entity Dissolved?
• Do I Need To Get a New EIN if I Move My Company to Florida?
• How Does FL Patel Law PLLC Merge My Massachusetts LLC into a Florida LLC?
• How Long Does It Take To Relocate a Massachusetts LLC to the State of Florida?
• What Are the Costs Involved in Relocating My Massachusetts LLC to the State of Florida?
• What Are Some of the Risks Associated With a Merger Gone Wrong?
• Increase Your Chances of a Successful Relocation
• What Are the Benefits of Merging My Massachusetts LLC into a Florida LLC?
• What Are the Tax Implications of Converting My Massachusetts LLC into a Florida LLC?
• Should I Work With Attorney Patel to Convert My Massachusetts LLC into a Florida LLC?

Massachusetts LLC owners are among the countless business owners who are looking to relocate to Florida to take advantage of our state’s world-class climate, lack of a state income tax, pro-business policies, and more. For states like Massachusetts that don’t facilitate statutory conversions, this type of move can be accomplished through a transaction known as a reincorporation merger.

Merging a Massachusetts LLC into a Florida LLC can be intimidating when you consider the logistics and risks involved. The good news for you is that FL Patel Law PLLC’s guidance can make all the difference in facilitating a flawless transition from state to state. 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 article will cover the ways that our clients benefit from our firm’s strategy for relocating a business from state to state by using a merger or statutory conversion. We’ll also touch on some of the risks associated with an incorrectly executed relocation and what an attorney can do to help you avoid those pitfalls and complications.

Each state has its own laws and requirements for merging LLCs. If you don’t strictly adhere to those requirements, then you could threaten the future of your business or even liquidate it altogether. A deep familiarity with these standards is just another way that you can benefit by partnering with our firm. Read on to find out more about the risks of merging a Massachusetts LLC into a Florida LLC without an attorney’s oversight.

Although it’s not possible to directly convert a Massachusetts LLC into a Florida LLC, you can still change your business into a Florida entity by conducting a reincorporation merger. This is accomplished by creating an entity in Florida that the Massachusetts LLC will then merge into, which helps protect the company’s continuity.

By merging your Massachusetts LLC into a Florida LLC that was created for relocation purposes, you can effectively move your company without dissolving it or otherwise disturbing its continuity.

This method allows the business to continue benefiting from its existing relationships, licenses, and contracts. It will even have the same rights, assets, privileges, and liabilities that it had back in Massachusetts, too.

After merging your Massachusetts LLC into a Florida LLC, your company will be governed by the Florida Revised Limited Liability Company Act. However, it might still need to abide by the Massachusetts Limited Liability Company Act if it still has a nexus or a foreign qualification in Massachusetts. Be sure to bring this up when speaking to our attorney.

Yes, Massachusetts LLCs can merge into Florida LLCs. See Mass. Gen. Laws Ann. ch. 156C, § 59. Corporations, on the other hand, can pursue a similar option known as domestication.

No. During this process, your Massachusetts entity is combined with another business entity rather than dissolved. It isn’t a necessary part of relocating an LLC to Florida. You should only file for dissolution when you’re ready to close your business down for good.

Whether your LLC can keep its EIN will ultimately depend on its particular situation. However, protecting your business’s continuity is essential to holding onto that original EIN. If a company has undergone no other major changes while also maintaining its continuity during a merger, then it can likely keep using the same EIN. Working with a lawyer to merge your Massachusetts LLC into a Florida LLC can help ensure that this is the case.

A successful merger requires executing a precise series of steps that vary from state to state. Below is a general outline of how we help our clients domesticate their Massachusetts LLCs to Florida. Keep in mind this is general advice and not for your specific situation. Please schedule a consultation with our attorney for guidance tailored to your business.

When hired to merge a Massachusetts LLC into a Florida LLC, we first review the business to confirm that this is, in fact, the best relocation method. It also gives us what we need to create a plan for domesticating the business and helps us head off any potential problems before they arise. 

We provide comprehensive support throughout the merger that includes:

• Drafting the Plan of Merger and other required documents
• Ensuring compliance with the laws and other legal requirements in both states
• Filing the necessary documents with Massachusetts and Florida state agencies
• Updating the LLC’s operating agreement and other corporate documents to reflect the merger
• Providing a comprehensive exit consultation to address final concerns and questions

Thanks to our firm’s experience and refined methodologies, you can expect your merger to be completed as quickly as possible – in about two or three months. Anyone claiming to have accomplished this on a faster timeline is likely mistaken, and probably dissolved their company before forming a new entity after getting to their new state.

Agencies in both states will need several weeks each to process their side of the paperwork. In other words, mistakes in your filings won’t just cost you more money – they can delay your company’s relocation to Florida as well. Working with an attorney to merge your Massachusetts LLC into a Florida LLC, however, serves to ensure that your project is kept on track from start to finish without any interruptions or other problems.

To start with, there will be three different filing fees required to make your merger happen. The first is $125.00 for your Florida organization documents. The filing fee for merger documents in Massachusetts is $100.00, while Florida’s is $25.00, coming to a total of $250.00. Obviously, there will likely be other costs associated with the move, and mistakes can only make things more expensive for you. In fact, a mishandled merger could even end up costing you more than you would have spent if you had hired a law firm to handle it for you.

Our merger and domestication clients enjoy fat fees on their projects based on their business and the complexity of the move. Schedule an initial consultation with our attorney now to get a quote for your merger. By trusting us to convert your Massachusetts LLC into a Florida LLC, you can stress less and have more time to focus on what matters most here – your business.

Without great diligence and a deep understanding of the laws in both states, merging a Massachusetts LLC into a Florida LLC can expose you to numerous threats and liabilities. Working with a law firm for projects like these is the best way to protect your business well into the future.

Some of the general risks of attempting to merge a Massachusetts LLC into a Florida LLC on your own without the proper 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 merger. 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 merging a Massachusetts LLC into a Florida LLC is that asset titles will automatically transfer over to the resulting entity – that is, assuming the merger 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.

These are just some of the problems that you can encounter when merging a business without a law firm’s oversight and expertise.

Our firm has helped relocate over 140 businesses to Florida, and that undeniable track record means that your interests are in safe hands when you hire us to merge your Massachusetts LLC into a Florida LLC.

Your business is important – don’t risk its future by attempting a merger without an attorney’s assistance. Hiring our firm can go a long way towards ensuring that everything runs smoothly when merging a Massachusetts LLC into a Florida LLC.

1. If your company is no longer doing business in Massachusetts after its merger, then it likely no longer has a nexus there. If that’s the case, then the LLC won’t need to file documents with the State of Massachusetts ever again.

2. Having an LLC in Florida means that you can partner with Florida professional accountants, attorneys, or service providers that know and live Florida LLC and business law.

3. Merging your Massachusetts LLC into a Florida LLC provides a seamless transition from state to state that won’t impact the company’s continuity or its ability to do business.

4. Your Massachusetts LLC’s original formation documents will be immediately replaced by the Florida Articles of Organization that our firm will draft for your company. All LLC powers remain LLC powers, along with rights, benefits, exemptions, privileges, and principles.

5. The members of the Massachusetts LLC can keep their original membership interests. Real estate and other property rights will also transfer to the merged entity. However, make note that any liabilities of the LLC will remain unaffected by the merger, as will any pending lawsuits. Any pending legal procedures or actions will be substituted with the name of the Florida LLC.

6. You won’t need to reside in Florida after merging your Massachusetts LLC into a Florida LLC.

7. After merging your LLC into a Florida LLC, you may no longer have a taxable connection (nexus) in Massachusetts, which could save you on state income taxes. Check with your tax professional for more guidance on these matters, as the specifics will be unique to each business.

8. Your merged entity can keep using the Massachusetts LLC’s EIN. The LLC continues to exist and report taxes as it did before. All that changes is the domicile of your LLC.

9. The merged entity can keep the same bank accounts, the same taxpayer ID, the same operations, and the same contracts that it had in Massachusetts, too. However, careful planning should be undertaken to ensure that this is the case.

Merging your Massachusetts LLC into a Florida LLC is likely to cause some tax implications for you and your business. The specific implications will vary from business to business. Our legal team can only provide general guidance in this area, so consulting with your tax professional before your merger is essential. Some common issues to consider bringing up are:

• State Income Tax: One of Florida’s most alluring prospects for business owners is that we have no state income tax, unlike states like Massachusetts. While you’ll still need to satisfy federal reporting duties, this is one way that converting your Massachusetts LLC to a Florida LLC could lower your tax burden.

• Franchise Tax: Florida doesn’t have a franchise tax for LLCs. The LLC will need to close any account with the Massachusetts Department of Revenue and file final returns if required.

• Nexus: Your business will still need to follow Massachusetts tax laws if it still has a nexus in that state, even after you merge your Massachusetts LLC into a Florida LLC. Nexus is generally established when a company has a physical presence, employees, or substantial activities in a given state.

The advantages of working with an attorney to merge a Massachusetts LLC into a Florida LLC cannot be overstated. In addition to the guidance gained from speaking with Attorney Patel, our clients also benefit from a post-merger checklist that introduces them to their new responsibilities as Florida business owners.

To finish the project off, our corporate attorney will hold a final consultation to address any remaining questions or concerns. Remember that, as a corporate law firm, we offer a suite of services to support our clients that could prove useful, if not necessary, to running a business in Florida.

The potential dangers involved in merging your own Massachusetts LLC into a Florida LLC should be averted at all costs. 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, too. Schedule with us now to get started.

Ready to embrace your business’s next chapter in beautiful Florida? Don’t risk your business’s continuity – enlist the help of an experienced business relocation attorney by calling (727) 279-5037, or if your business is ready to move, check out our service page.

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