Can You Domesticate a Virginia Corporation to Florida?

Can You Domesticate a Virginia Corporation to Florida?

Domesticating or Moving a Virginia Corporation to Florida

There are many reasons to move your business from Virginia to Florida besides our state’s wonderful weather and tropical beaches. For example, Florida is one of the few states that doesn’t impose its own personal income tax on its residents. Our state is also increasingly known for its pro-business policies that are consistently reinforced across every branch of government. If you’re interested in bringing your corporation to Florida, then you should take a moment to familiarize yourself with something called “domestication,” which allows qualifying businesses to amend their formation state. LLCs have a comparable option available to them, known as statutory conversion.

Does Virginia Allow Corporations to Domesticate to Florida? 

Virginia corporations are allowed to domesticate pursuant to Va. Code Ann. § 13.1-898.2

B. A domestic corporation not required by law to be a domestic corporation may become a foreign corporation if the jurisdiction in which the corporation intends to domesticate allows for the domestication. Regardless of whether the laws of the foreign jurisdiction require the adoption of a plan of domestication, the domestication shall be approved in the manner provided in this article. The laws of the jurisdiction in which the corporation domesticates shall govern the effect of domesticating in that jurisdiction. 

What Happens to My Virginia Corporation During Domestication? 

Domestication is our firm’s favorite option for relocating a corporation to Florida because it allows our Clients to move their businesses while maintaining continuity. The domesticated entity is the same business that existed in Virginia, just with a new state of formation. Its FEIN, incorporation date, as well as any property and contractual rights will remain unchanged. The corporation may need to find a new name, however, if its original name is already reserved by a Florida entity, so be sure to perform a name availability search before making any final calls. 

What are the Effects of Domesticating a Corporation?

Domestication will have a minimal impact on your business. The only significant changes are that your corporation’s formation state will change from Virginia to Florida, and that it will now be treated as if it had been incorporated in Florida from the start. Shareholder rights, the rights to acquire new shares, as well as the value of those shares and any securities and eligible interests will all be preserved during the domestication. Any obligations, lawsuits, liabilities, or other proceedings will similarly carry over from the Virginia corporation to the domesticated entity.

Does My Virginia Corporation Dissolve When It Domesticates to Florida? 

Rather than dissolving your corporation, domestication simply changes its formation state while keeping the original business intact. Domesticating your business does, however, mean losing the ability to conduct business in your original state. If you want your domesticated Florida corporation to have a presence somewhere outside the Sunshine State, then you’ll first need to file for a Foreign Qualification in those specific jurisdictions. 

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

Domesticating your corporation to Florida can be completed within four to twelve weeks, although it might take longer if it owns any real estate. For a more precise estimate, ask your attorney after they have had time to review your business and its assets. 

How Do I Domesticate My Virginia C or S Corporation? 

Domestication, like most statutory processes, calls for filing a decent amount of paperwork with agencies in both Virginia and Florida. First, you’ll need to draft a Plan of Conversion. This Plan outlines the domestication process, and should cite the authorizing statutes in each state, document who owns what and how much in the company as well as any expected tax consequences and the transfer of rights and obligations. Next, the Plan needs to be approved of by the Board of Directors. Once that approval has been obtained, you’re good to file the remaining documents with the relevant state agencies. 

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 Allow the Domestication of Virginia Corporations?

Florida allows corporations from qualifying states – such as Virginia – 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 Virginia corporation ready to make the move to its new home in 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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