Can You Relocate, Domesticate, or Convert a North Dakota LLC to a Florida LLC?
Relocating, Domiciling, Transferring, or Converting a North Dakota LLC to a Florida LLC
Updated: October 10, 2023
Reading Time: 10 Minutes
- Domicile a North Dakota Limited Liability Company (LLC) to Florida;
- Maintain the same EIN and identity of the LLC; and
- Enjoy tax benefits provided to Florida residents.
- Dakota Limited Liability Companies (LLCs)
Table of Contents
- What is a Conversion or Domestication?
- Does North Dakota Allow LLCs to Move Out of State?
- Is My North Dakota 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 North Dakota 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 North Dakota 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 North Dakota LLC to a Florida LLC?
- What Are the Tax Implications of Converting My North Dakota LLC to a Florida LLC?
- Should I Work With Attorney Patel to Convert My North Dakota LLC to a Florida LLC?
Moving a North Dakota LLC to Florida can come with many advantages to both the business and its owners. These benefits aren’t limited to Florida’s lack of a state income tax, either, as there are many other pro-business policies on the books in the Sunshine State. This can be accomplished through a corporate transaction commonly known as statutory conversion.
Without the right legal guidance, converting a North Dakota LLC to a Florida LLC can come with many challenges and risks for both the company and its owners. The good news is that the legal team at FL Patel Law PLLC can make a major difference when it comes to ensuring 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 go over our firm’s process for converting a North Dakota LLC to a Florida LLC while also explaining how working with us can save time and money in addition to preventing potential legal and regulatory problems. It also has some vital information about the dangers involved with taking on this type of transition without an attorney’s assistance.
The conditions and steps required to convert an entity to a new state are highly specific and vary from project to project. Even small missteps can come with serious consequences that range from fines to the dissolution of your business. Keep on reading for more about the risks associated with trying to convert a North Dakota LLC to a Florida LLC without an attorney’s oversight.
What is a Conversion or a Domestication?To top
Statutory conversion allows an LLC to change its state of formation without forcing its business owners to dissolve their original entity and start over again in their chosen location. However, both states must have laws that authorize this type of move.
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.
There are many advantages offered to the conversion process, especially when compared to some other methods for relocating a company from one state to another. For example, it helps minimize disruptions to the business and preserve important relationships, contracts, and licenses. The North Dakota LLC’s rights, assets, privileges, and liabilities will likewise transfer over to the converted Florida LLC.
As a Florida LLC, your business will be governed by the Florida Revised Limited Liability Company Act. While this won’t be the case for every business, you should still know that there are some circumstances where the North Dakota Uniform Limited Liability Company Act will continue to regulate the entity as well, such as if it has a foreign qualification or nexus (taxable connection) in its original state. Be sure to bring this up with Attorney Patel during your initial consultation.
Does North Dakota Allow Limited Liability Companies (LLCs) to Move Out of State?To top
Yes, North Dakota authorizes LLC conversions under Section 10-32.1-67 of the North Dakota Century Code Annotated. North Dakota C and S corporations are also allowed to become Florida corporations using a similar method commonly known as domestication.
2. A limited liability company may become a foreign limited liability company pursuant to this section, sections 10-32.1-67 through 10-32.1-71, and a plan of domestication if:
a. The governing statute of the foreign limited liability company authorizes the domestication;
b. The domestication is not prohibited by the law of the jurisdiction that enacted the governing statute; and
c. The foreign limited liability company complies with its governing statute in effecting the domestication.
Is My North Dakota Entity Dissolved?To top
No, converting a North Dakota LLC to a Florida LLC won’t dissolve the original entity. The business will continue to exist as it always has, just with a new domicile. Some articles online incorrectly instruct business owners to dissolve their original entity as a part of the conversion process. Dissolution is not a part of changing a North Dakota LLC to a Florida LLC and should only be initiated when it’s time to close the company for good.
Do I Need To Get a New EIN if I Domesticate My Company to Florida?To top
Whether a company can continue using the same EIN after converting into an entity in a new jurisdiction is ultimately decided by the Internal Revenue Service (IRS) based on the specific circumstances of the company’s move. However, an attorney’s familiarity with this process can increase your chances of securing your original EIN. Generally speaking, two of the most important factors here are ensuring that no other changes are made to the business’s corporate identity and that its continuity isn’t interrupted, either.
How Does FL Patel Law PLLC Convert My North Dakota LLC to a Florida LLC?To top
All conversion and domestication projects have their own specific requirements based on the business’s needs and which states are involved. However, they all share a core set of procedures that must be completed in order to be successful. What follows is an overview of how we address those core commonalities, not instructions for converting a North Dakota LLC to a Florida LLC. If you’re looking for that kind of hands-on guidance, then you need to schedule your initial consultation with us now.
At the start of the project, we conduct our initial consultation with the client and thoroughly review their business operations. This allows us to confirm that the entity is eligible for statutory conversion and gives us the information necessary to build a strategy for relocating the company with its continuity and corporate identity intact. This level of research also helps ensure that we’re able to satisfy, if not surpass, all of the client’s goals for converting their North Dakota LLC to a Florida LLC.
Hiring FL Patel Law PLLC to convert your North Dakota LLC to a Florida LLC means that you can benefit from the convenience and security that comes with our following services:
- Drafting the Plan of Conversion and other required documents
- Ensuring compliance with the laws and other legal requirements in both states
- Filing the necessary documents with North Dakota and Florida state agencies
- Updating the LLC’s operating agreement and other corporate documents to reflect its conversion from a North Dakota 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
Unlike some other, less experienced law firms, our legal team can complete your business’s conversion from a North Dakota LLC to a Florida LLC as quickly as possible. Under most circumstances, this amounts to about two or three months due to the processing times involved. However, more time might be necessary depending on the size of the business and its assets.
Each state agency will need a minimum of several weeks to process these filings, and they cannot be made at the same time. These agencies also sometimes face their own delays due to backlogs and short staffing problems. This means that even minor mistakes with your paperwork could set your company’s relocation back for months, on top of incurring additional costs.
What Are the Costs Involved in Domesticating My North Dakota LLC to the State of Florida?To top
North Dakota’s filing fee for LLC conversions is $50.00. When added with Florida’s filing fee of $105.00, this comes to a total of $155.00 just to have your paperwork processed. Keep in mind that this is the minimum amount you can expect to pay for these filings. For example, you will need to pay additional fees if you want your LLC to keep doing business in North Dakota after its move. Mistakes, too, can drive costs even higher, especially if they lead to legal or regulatory problems.
Our conversion and domestication clients receive flat fees for their projects based on the complexity of their business and the move itself. This is just another way that we help minimize costs for our clients, in addition to preventing the kinds of simple mistakes that can lead to major expenses. Schedule your initial consultation with Attorney Patel now to review your business and get a quote for converting a North Dakota LLC to a Florida LLC.
What Are Some of the Risks Associated With a Conversion Gone Wrong?To top
Don’t discount the level of knowledge, experience, research, time, and attention to detail that goes into a successful statutory conversion. By working with our law firm, you can ensure that your company has everything that it needs to become a Florida LLC without issue. Moving forward alone, however, can cause problems that range from fines to legal problems and more.
Among other dangers, some of the risks of proceeding with this type of transition without legal guidance can 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
- 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 North Dakota 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.
Again, these are only some of the consequences that can result from mismanaging your company’s conversion from a North Dakota LLC to a Florida LLC.
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 North Dakota LLC to a Florida LLC.
Increase Your Chances of a Successful ConversionTo top
The guidance of an experienced conversion and domestication attorney is the best way to keep both the LLC and all of its members safe during the entity’s relocation to Florida. Without that kind of professionalism, insight, and expertise, there’s no way to be sure whether your company will even successfully make it across state lines.
What Are the Benefits of Converting My North Dakota LLC to a Florida LLC?To top
1. You won’t be obligated to file documents with the State of North Dakota after converting your business to a Florida LLC unless it still has a taxable connection (nexus) in that state.
2. Relocating your LLC to Florida gives you the opportunity to work with Florida professional accounts, attorneys, and other helpful service providers.
3. Your company’s transition from a North Dakota LLC to a Florida LLC will be free from delays and interruptions while undergoing statutory conversion.
4. The LLC’s original formation documents from North Dakota will be seamlessly replaced by Florida Articles of Organization drafted and filed by our firm on our client’s behalf. This is a part of ensuring that our client’s business can keep the same powers, rights, benefits, exemptions, privileges, and principles after relocating to Florida.
5. Membership interest won’t be changed by converting your business from a North Dakota LLC into a Florida entity. Property rights, such as real estate, will also be maintained during this process. Liabilities and lawsuits will also be unaffected by the Florida conversion, as will any pending lawsuits. Any pending legal procedures or actions can be substituted with the name of the Florida LLC.
6. The business’s owners don’t need to be Florida residents in order to convert a North Dakota LLC to a Florida LLC.
7. Your converted Florida entity won’t be required to maintain its original nexus (taxable connection) in North Dakota. As a result, you might be able to reduce the burden of tax issues at the state level. Talk to your tax professional about this, as the specific tax consequences of your conversion will depend on factors unique to your LLC.
8. There’s no need to get a new EIN for your converted entity. The Florida LLC is the same business that existed in North Dakota, just with a new official state of formation.
9. Using statutory conversion to relocate your business from North Dakota to Florida allows your business to continue using the same bank accounts, the same taxpayer ID, the same operations, and the same contracts. That said, careful planning and consultation should be undertaken before starting the conversion process to ensure that this is the case.
What Are the Tax Implications of Converting My North Dakota LLC to a Florida LLC?To top
Because of the different tax laws in each state, it’s essential to prepare for the tax implications of converting a North Dakota LLC to a Florida LLC before making your move. Our law firm can only offer general information on these matters, so be sure to discuss this project with your tax professional, too. A few items that you might want to bring up when meeting with them could include:
- State Income Tax: While North Dakota has a relatively low state income tax rate, Florida has no state income tax whatsoever. Federal income tax obligations will remain, but this is one way that business owners could be able to save money by converting a North Dakota LLC to a Florida LLC.
- Franchise Tax: Unlike some other states, Florida doesn’t have a franchise tax, either. There’s no need to worry about this becoming an added expense after your business’s conversion into a Florida LLC.
- Nexus: Your converted Florida LLC will still need to follow North Dakota tax laws if it continues to have a nexus (taxable connection) in North Dakota after its transfer to the Sunshine State. Generally, a nexus is created when a business has employees, a physical presence, or substantial activities in a particular state.
Should I Work With Attorney Patel to Convert My North Dakota LLC to a Florida LLC?To top
After the client’s entity has been successfully converted from a North Dakota LLC to a Florida LLC, Attorney Patel has a final comprehensive consultation with them to ensure that all of their questions and concerns have been fully addressed and answered. At this time, we also provide them with a post-conversion checklist with instructions to help guide them through their new responsibilities and obligations and Florida LLC members.
Don’t underestimate the level of value that Attorney Patel’s advice and guidance can bring to your company both during and after its conversion from a North Dakota LLC to a Florida LLC. In addition to helping our clients with their efforts to relocate to Florida, our firm also provides many other services for business owners that could prove useful after your company’s relocation.
Trusting your conversion to our corporate law firm allows you to benefit from the years of experience that we have with managing these types of transitions. It also gives you more time and energy to focus on your business while we handle the legal complexities of its relocation. Schedule with us now to get started with converting your North Dakota LLC to a Florida LLC.
Is your North Dakota LLC ready for a new start on the east coast? Don’t risk breaking your business’s stride — get assistance from an experienced business conversion attorney by scheduling online or calling (727) 279-5037.
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