Can You Relocate or Convert a South Dakota LLC to a Florida LLC?
Relocating, Domiciling, Transferring, or Converting a South Dakota LLC to a Florida LLC
Updated: October 4, 2023
Reading Time: 10 Minutes
- Domicile a South Dakota Limited Liability Company (LLC) to Florida;
- Maintain the same EIN and identity of the LLC; and
- Enjoy tax benefits provided to Florida residents.
- South Dakota Limited Liability Companies (LLCs)
Table of Contents
- What is a Conversion or Domestication?
- Does South Dakota Allow LLCs to Move Out of State?
- Is My South 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 South 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 South 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 South Dakota LLC to a Florida LLC?
- What Are the Tax Implications of Converting My South Dakota LLC to a Florida LLC?
- Should I Work With Attorney Patel to Convert My South Dakota LLC to a Florida LLC?
Companies from across America often relocate to Florida to take advantage of our state’s numerous pro-business policies and our lack of a state income tax. This type of move can be made using a process known as statutory conversion, which is our firm’s preferred method for changing a client’s South Dakota LLC to a Florida LLC.
A project as daunting as trying to convert a South Dakota LLC to a Florida LLC can present many challenges and outright dangers, but FL Patel Law PLLC’s guidance can make all the difference and help ensure 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 demonstrate some of the different ways that our legal team can save business owners time and money when converting a South Dakota LLC to a Florida LLC. It also has some important warnings about what can go wrong if this type of transition isn’t managed by an attorney, plus how working with our firm can prevent delays and other problems from threatening your company’s move to Florida.
Because of the different state laws and multiple other factors involved, the necessary steps for a successful statutory conversion will vary from business to business. Failing to follow these specific requirements can lead to painful consequences for both the LLC and its members. Our firm guides our clients through each step while diligently minimizing delays and also ensuring legal and tax compliance.
What is a Conversion or a Domestication?To top
By using statutory conversion, an LLC can legally change its state of formation. For example, it can be used to change a South Dakota LLC to a Florida LLC.
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.
When converting a South Dakota LLC to a Florida LLC, the business’s continuity won’t be interrupted, and it won’t be forced to change anything else about its identity, either. This serves to minimize disruptions and also helps preserve essential relationships, contracts, and licenses. The South Dakota LLC’s rights, assets, privileges, and liabilities will transfer over to the Florida LLC as well.
Once its conversion into a Florida LLC is complete, your entity will be regulated by the Florida Revised Limited Liability Company Act. However, the South Dakota Uniform Limited Liability Company Act can continue to apply even after the business’s transition under certain circumstances. Such circumstances include having a foreign qualification or nexus in South Dakota after converting into a Florida LLC. Be sure to talk about this with our attorney during your initial consultation.
Does South Dakota Allow Limited Liability Companies (LLCs) to Move Out of State?To top
LLCs formed in South Dakota are allowed to convert into Florida LLCs under Section 47-34A-910 of the South Dakota Codified Laws. A similar law also allows South Dakota C and S corporations to become Florida entities as well.
(b) A limited liability company may become a foreign limited liability company pursuant to §§ 47-34A-911 to 47-34A-913, inclusive, and a plan of domestication, if:
(1) The foreign limited liability company’s governing statute authorizes the domestication;
(2) The domestication is not prohibited by the law of the jurisdiction that enacted the governing statute; and
(3) The foreign limited liability company complies with its governing statute in effecting the domestication.
Is My South Dakota Entity Dissolved?To top
No. While your company won’t be able to keep doing business in South Dakota after becoming a Florida LLC without a foreign qualification, this doesn’t mean that the original entity no longer exists. Dissolution isn’t required to convert a South Dakota LLC to a Florida LLC, either, despite what some sources online might incorrectly claim. A company should only be dissolved when it’s time to shut it down for good.
Do I Need To Get a New EIN if I Domesticate My Company to Florida?To top
The Internal Revenue Service (IRS) determines whether a business can continue using the same EIN after undergoing statutory conversion depending on the particular circumstances of that company’s move. Perhaps the most important considerations, however, relate to the LLC’s continuity, which must be maintained at all costs throughout the process. In addition to other factors, no changes can be made to the business’s identity, either, besides updating its formation state.
How Does FL Patel Law PLLC Convert My South Dakota LLC to a Florida LLC?To top
Each conversion project will have its own specific requirements based on the states involved and other factors unique to the relocating entity. What follows is a brief overview of the foundational process that we use to tackle the steps all of these projects have in common. These are not instructions for converting a South Dakota LLC to a Florida LLC on your own. For that kind of legal guidance, schedule your initial consultation with us now.
All of our entity relocation projects begin with an initial consultation and a review of the client’s company. This helps us ensure that the business qualifies for this process. It also gives us the information that we need to relocate the company to Florida with its continuity and corporate identity intact.
The full range of support that our clients enjoy when they hire us to convert a South Dakota LLC to a Florida LLC includes:
- 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 South Dakota and Florida state agencies
- Updating the LLC’s operating agreement and other corporate documents to reflect its conversion from a South 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
By working with our dedicated legal team, your company’s conversion from a South Dakota LLC to a Florida LLC can be completed as quickly as possible thanks to our years of experience in this field. We also expedite filings whenever possible, and have implemented a series of processes to help streamline these types of projects for our clients without sacrificing the business’s security.
At least several weeks of processing time will be required by the relevant agencies in each state, and as a result, even small mistakes with your paperwork can cause serious delays for your business’s transition from a South Dakota LLC to a Florida LLC. These agencies sometimes face delays of their own, too, so it’s essential that your filings are handled correctly the first time around. The best way to ensure that this is the case is to hire an attorney to manage your company’s move.
What Are the Costs Involved in Domesticating My South Dakota LLC to the State of Florida?To top
Filing fees, much like many other requirements demanded by the conversion process, vary from state to state. Florida charges $155.00 and South Dakota charges $150.00, so it’s going to cost at least $305.00 just to have each state process your initial paperwork. Any mistakes that you make when converting a South Dakota LLC to a Florida LLC will likely come with their own expenses, too, in the form of repeated filing fees, fines, and other costs that could have been avoided with an attorney’s assistance.
Our clients receive flat fees for their conversion and domestication projects. We calculate these fees based on the specific demands and challenges presented by that company’s relocation. If you’re looking to convert a South Dakota LLC to a Florida LLC, then schedule your initial consultation with Attorney Patel now to review your project and get a quote for your business’s transfer.
What Are Some of the Risks Associated With a Conversion Gone Wrong?To top
An attorney is a business owner’s best hope for ensuring a successful transition from a South Dakota LLC to a Florida LLC. Without legal guidance, your business could face problems ranging from fines to the accidental dissolution of your business.
Some of the other dangers that you and your company can be exposed to by proceeding to convert your South Dakota LLC to a Florida LLC 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 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 South 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.
Keep in mind that these are only some of the things that can go wrong if your LLC’s conversion isn’t protected by an attorney’s guidance and expertise.
With over 140 business conversions and domestications to our credit, our firm’s proven track record means that your interests are in safe hands when we’re the ones in charge of converting your South Dakota LLC to a Florida LLC.
Increase Your Chances of a Successful ConversionTo top
Don’t gamble with your company’s well being by trying to convert it from a South Dakota LLC to a Florida LLC without the convenience and security that comes with an attorney’s guidance. Working with us allows you and your LLC to benefit from our years of experience with these types of transitions.
What Are the Benefits of Converting My South Dakota LLC to a Florida LLC?To top
1. As a Florida entity, your LLC won’t need to file any documents with the State of South Dakota again unless it maintains a nexus in its original formation state.
2. Becoming a Florida LLC owner allows you to work with Florida professional accountants, attorneys, and other service providers.
3. Hiring our firm to convert a South Dakota LLC to a Florida LLC helps secure a seamless transition from state to state free from interruptions.
4. Your company’s original formation documents will be replaced by Florida Articles of Organization without delay upon their filing. All LLC powers remain LLC powers, along with rights, benefits, exemptions, privileges, and principles.
5. Membership interest won’t be changed by converting a South Dakota LLC to a Florida LLC. Real estate and other property rights will similarly remain unaffected. Liabilities and pending lawsuits will also transfer over to the converted Florida entity. For these actions, the Florida LLC’s name may be used as a substitute.
6. The LLC’s owners don’t need to live in Florida in order to convert their company into a Florida business.
7. After converting a South Dakota LLC to a Florida LLC, there won’t be any requirement to keep a taxable connection (nexus) in the LLC’s original formation state. This could lower your company’s tax burden at the state level, but be sure to check with your tax professional, as the specifics will be unique to each business.
8. Because the Florida LLC is the same business that existed in South Dakota, it can keep using the same EIN.
9. Another convenience offered by the conversion process is that your Florida LLC can keep using the same bank accounts, taxpayer ID, operations, and contracts that it used as a South Dakota LLC. Careful planning and consultation should be undertaken before engaging in domestication or conversion, however, to help ensure that this is the case.
What Are the Tax Implications of Converting My South Dakota LLC to a Florida LLC?To top
Every state’s tax laws are different, which means that preparing for the changes that will result from converting a South Dakota LLC to a Florida LLC is vital to the success of your company’s move. Be sure to talk to your tax professional about this, as the specific implications will vary from company to company, and our law firm can only offer limited information in these areas. Some items to bring up in your discussion with them could include:
- State Income Tax: Both Florida and South Dakota are among the few states that don’t have an income tax at the state level. Although federal income tax responsibilities will remain after converting the South Dakota LLC to a Florida LLC, this is one thing that you don’t have to worry about becoming an added expense after your company’s move.
- Franchise Tax: Like South Dakota, Florida LLCs are not subject to a franchise tax in this state.
- Nexus: An LLC must follow the tax laws of any state where it has a nexus, regardless of its state of formation. A nexus, or taxable connection, is typically created when a business has a physical presence, employees, or substantial activities in a certain state.
Should I Work With Attorney Patel to Convert My South Dakota LLC to a Florida LLC?To top
At the end of the project, Attorney Patel hosts a comprehensive consultation to review the conversion and ensure that all of the client’s questions have been answered. During this meeting, our clients are also given a post-conversion checklist with instructions to help them adapt to their new lives as Florida LLC members.
Attorney Patel has a unique perspective on business and legal matters thanks to his time as both a lawyer and an entrepreneur himself. Our law firm also hosts a suite of services to help support business owners that could be useful for your newly converted Florida LLC.
A project as substantial and consequential as converting a South Dakota LLC to a Florida LLC deserves an attorney’s professional level of care and attention. 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. Schedule with us and get started today.
Ready to embrace your business’s next chapter by converting your South Dakota LLC to a Florida LLC? Don’t risk your business’s continuity – enlist the help of an experienced business conversion attorney by calling (727) 279-5037 or by scheduling a time through our online calendar.
Image by Thinkstock from Canva.