Considerations for Converting or Merging a South Carolina LLC into a Florida LLC

Relocating, Domiciling, Transferring, Converting, or Merging a South Carolina LLC into a Florida LLC

Updated: July 21, 2023
Reading Time: 10 Minutes

Objective:

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

Entities:

• South Carolina Limited Liability Companies (LLCs)

Table of Contents

• What is a Conversion, Merger, or Domestication?
• Does South Carolina Allow LLCs to Move Out of State?
• Is My South Carolina 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 South Carolina LLC into a Florida LLC?
• How Long Does It Take To Relocate a South Carolina LLC to the State of Florida?
• What Are the Costs Involved in Relocating My South Carolina 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 South Carolina LLC into a Florida LLC?
• What Are the Tax Implications of Converting My South Carolina LLC into a Florida LLC?

Relocating an LLC from South Carolina to Florida could benefit the company and its members in many ways, but it’s important that the process is handled with care. Whether it’s a lower tax burden or one of our state’s many other pro-business policies, more businesses than ever are looking to move to the Sunshine State. LLCs from states that don’t allow statutory conversions, such as South Carolina, can accomplish this type of move by undergoing a reincorporation merger instead.

Merging a South Carolina LLC into a Florida LLC can pose serious risks to those who attempt the process without the right legal knowledge or guidance. FL Patel Law PLLC’s legal team has both the experience and the proficiencies necessary to safely and smoothly relocate your company. Our firm has successfully reorganized over 140 businesses into Florida entities, providing us with the necessary insight to prepare them for success.

This article will give you an overview of what our firm does to protect our client’s interests when we merge a South Carolina LLC into a Florida LLC, as well as how our process could save them time and money. It also has some important information about the risks of trying to domesticate an LLC without an attorney’s oversight and how working with our firm can help keep those issues from ever becoming problems at all.

Reincorporation mergers must be executed correctly on the first attempt in order to prevent delays, disruptions, and other dangers to both your company and its members. Some mistakes could even liquidate your LLC, which comes with its own consequences to deal with. Our firm can help your company safely navigate its way through these risks – keep reading to find out more about just how we make that happen.

Merging a South Carolina LLC into a Florida LLC that our firm sets up on your behalf can allow you to relocate your company without having to change its corporate identity.

When properly managed, this method protects the LLC’s continuity. This helps prevent disruption and allows the resulting entity to benefit from the same relationships, licenses, and contracts that it did before. It’s also a necessary part of ensuring that all of the South Carolina LLC’s rights, assets, privileges, and liabilities will properly transfer over to Florida, too.

Merging a South Carolina LLC into a Florida LLC allows its members to change their company’s formation state while keeping the rest of the business’s corporate identity exactly the same. Not only does this minimize interruptions – it’s an essential part of preserving relationships, contracts, and licenses that are vital to your company’s operations. It also means that the original LLC’s rights, assets, privileges, and liabilities will automatically transfer to the merged entity.

The Florida Revised Limited Liability Company Act will replace the South Carolina Uniform Limited Liability Company Act once the company’s reincorporation merger is complete. However, it’s possible that both laws could apply to the merged entity if the business has a foreign qualification or still has a taxable connection in South Carolina. Remember to bring this up when speaking to our attorney about merging your South Carolina LLC into a Florida LLC. Reserve your time now.

Yes, you can relocate your company by merging a South Carolina LLC into a Florida LLC according to section 33-44-904 of the South Carolina Code.

Your company should not be dissolved when you merge a South Carolina LLC into a Florida LLC unless mistakes are made during the process. This is always a possibility if you move forward without legal guidance for your company’s move. Ignore any instructions you find online that state that dissolution is a necessary part of merging two LLCs together, as this just isn’t true. Dissolution should only be pursued when it’s time for liquidation.

Although the Internal Revenue Service (IRS) decides this on a circumstantial basis, working with a law firm can go a long way towards ensuring that your business can continue using the same EIN after merging a South Carolina LLC into a Florida LLC. That’s because, generally, a company can keep its EIN if its continuity is protected and no changes are made to the LLC other than to its formation state.

While all reincorporation mergers share some common steps, there will always be some differences depending on the states involved and the business’s specific situation. What follows is a general outline of our process, not instructions for how to merge a South Carolina LLC into a Florida LLC. Please schedule a consultation with our attorney for your guidance related to your company’s unique circumstances.

Our initial consultation and business review form the foundation of all of our LLC and corporate relocation projects. By better understanding the client’s goals for merging a South Carolina LLC into a Florida LLC, we can identify and prevent potential delays and interruptions before they can threaten the business’s move. This step also confirms that the business qualifies for a reincorporation merger and helps us create a personalized strategy for making it happen.

The wide-ranging support that we give our clients when merging a South Carolina LLC into a Florida LLC 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 South Carolina 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

One of the advantages of teaming up with us is that we can merge your South Carolina LLC into a Florida LLC on the fastest timeline possible – in about two or three months. This speed is thanks to our skilled legal team’s experience with these transfers as well as our firm’s refined and efficient process for making them happen. Expediting our filings whenever possible helps a lot, too.

Because of backlogs, shart staffing, and other issues, the state agencies responsible for these documents will need a minimum of several weeks of processing time. In other words, your company’s relocation could be set back significantly if you don’t get all of your paperwork right on the first try. Our legal team’s expertise and attention to detail could be the deciding factor that keeps your company on schedule when merging a South Carolina LLC into a Florida LLC.

The first expense of your reincorporation merger will be a $125.00 formation fee used to set up the Florida LLC that your preexisting South Carolina LLC will merge into. Next, you will need to pay for each state to process the merger itself. Every state sets their own filing fee for this. Florida charges $25.00 for LLC mergers while South Carolina charges $110.00. When combined with that $125.00 filing fee, the total amount that you can expect to spend just to have each state look at your documents comes to a total of $260.00.

Our LLC relocation projects are handled on a flat fee basis, the exact cost of which is determined by the needs of that specific transfer. With us as your ally, you won’t have to worry about paying your filing fees multiple times to correct mistakes and missing information. Schedule an initial consultation with our attorney now to get a quote for merging your South Carolina LLC into a Florida LLC.

Unless you have an attorney to help keep everything on track, there are many ways that a reincorporation merger could endanger both your LLC and its members. For example, you could even accidentally liquidate your company depending on what mistakes you make when trying to merge a South Carolina LLC into a Florida LLC. Working with a law firm for a project as substantial as this is the best way to protect everyone’s interests when moving a company to a new state.

The risks of trying to merge a South Carolina LLC into a Florida LLC without the kind of tried and trusted legal guidance provided by our firm 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 South Carolina 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.

Be aware that these are only some of the problems that you might encounter by proceeding without a law firm’s oversight and expertise. The preceding list was not comprehensive.

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 South Carolina LLC into a Florida LLC.

Trying to navigate a transition of this scale without legal guidance could undo all of the hard work that has been placed into your business so far. Hiring our firm can go a long way towards ensuring that everything runs smoothly when merging a South Carolina LLC into a Florida LLC.

1. In many situations, your company won’t need to file documents with the State of South Carolina ever again after its reincorporation merger. However, it must lose its nexus in its original state when merging from a South Carolina LLC into a Florida LLC for this to be the case.

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

3. Your company’s move will be free from interruptions, delays, and other disruptive problems that would threaten its ability to do business when you hire our firm to merge a South Carolina LLC into a Florida LLC.

4. Florida Articles of Organization will take the place of your LLC’s original founding documents without delay, ensuring its continuity. All LLC powers remain LLC powers, along with rights, benefits, exemptions, privileges, and principles.

5. The value of the LLC’s membership interest and the amount of interest held by each member will not be changed if you merge a South Carolina LLC into a Florida LLC. Real estate and other property rights will also transfer to the Florida LLC after conversion. However, make note that any liabilities of the LLC will remain unaffected by the Florida conversion, as will any pending lawsuits. Any pending legal procedures or actions will be substituted with the name of the Florida LLC.

6. The company’s members do not need to live in Florida after merging a South Carolina LLC into a Florida LLC.

7. Your relocation potentially removes its previous nexus (taxable connection) in South Carolina, which could reduce what your company has to pay on state income taxes. Talk to your tax professional about this, as the specific tax implications faced by relocating LLCs differ from business to business.

8. Merging a South Carolina LLC into a Florida LLC allows the business to continue using the same EIN, as it is considered to be the same entity that existed before, just with a new domicile.

9. The merged entity can keep using the same bank accounts, the same taxpayer ID, the same operations, and the same contracts that it used before, too. However, careful planning should be undertaken to ensure that this is the case when merging a South Carolina LLC into a Florida LLC.

There are a lot of different ways that taxes can change for a business moving from one state to another. However, the specific implications will vary from business to business, and because our legal team will only be able to provide general information in this area, it’s critical that you also enlist the help of a tax professional when you merge a South Carolina LLC into a Florida LLC. Some things to discuss with them include:

• State Income Tax: Your business may never have to pay state income tax again if it merges from a South Carolina LLC into a Florida LLC because Florida, unlike South Carolina, does not have this type of tax for its residents. Income tax responsibilities at the federal level will, of course, remain an important obligation.

• Franchise Tax: Franchise tax is yet another area where your South Carolina LLC could reduce its tax burden by reorganizing as a Florida entity, as this tax is not required by the State of Florida, either. The LLC will need to close any account with the South Carolina Department of Commerce and file final returns if required.

• Nexus: Your business could still have to abide by South Carolina tax laws even after its merger if it still has a nexus (also known as a taxable connection) there after its transition from a South Carolina LLC into a Florida LLC. A nexus is typically created when a business has a physical location, employees, or otherwise conducts substantial activities in a specific state.

As a law firm dedicated towards helping entrepreneurs, we offer a suite of services to support our clients that could prove useful, if not necessary, to businesses relocating to Florida from another state. This is true both during and after their company’s move, as Attorney Patel’s proficiencies cover a wide range of practice areas.

After the business has been relocated to Florida, Attorney Patel sits down with our clients to have a final consultation to answer any remaining questions they have about their project. They also receive a post-merger checklist and instructions to help them adapt to their new responsibilities as Florida business owners.

Unless you have an attorney to watch out for you and your company’s best interests, then you stand to lose everything if something goes wrong when trying to merge a South Carolina LLC into a Florida LLC. By trusting your move 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.

Moving cross-country is going to take up enough of your time. Spare yourself the stress by trusting our firm to relocate your South Carolina corporation to Florida. Don’t risk breaking your business’s stride — get assistance from an experienced business relocation attorney by calling (727) 279-5037 or by scheduling a consultation through our online calendar.

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