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Law Pro
Law Pro, Attorney
Category: Business Law
Satisfied Customers: 24040
Experience:  20 years experience in business law - sole proprietor, partnership, and corporations
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I have a business in Florida, but will be moving out of state.

Customer Question

I have a business in Florida, but will be moving out of state. Last year I already registered my business in the state I am moving to. However, my question is I do not want to keep paying my yearly responsibilities here in FL since I will not be doing business here. SO my question is how can I close this business in Fl, but still keep it opened and running in the other state. Is this possible being the way it is already set up?
Submitted: 11 months ago.
Category: Business Law
Expert:  Law Pro replied 11 months ago.

Hi! My name is Fred and I'll be the attorney assisting you.

 

If you move your corporation to a new state, you have one of three options:

 

1) continue as a corporation in the old state and register as a foreign corporation doing business in the new state;

 

2) dissolve the corporation in the old state and form a corporation in the new state; or

 

3) do a reorganization, where a corporation is formed in the new state and the old corporation is merged into it. If you use a reorganization, you can continue to use your employer identification number (EIN) for the newly merged company. Also, the corporation continues to use the same basis and holding periods for its equipment and other assets. In effect, it’s as if there had been no change for federal tax purposes, but the merged corporation does cease to exist in its original state

If you use a reorganization, you can continue to use your employer identification number (EIN) for the newly merged company. Also, the corporation continues to use the same basis and holding periods for its equipment and other assets. In effect, it’s as if there had been no change for federal tax purposes, but the merged corporation does cease to exist in its original state.
Read more at http://www.startupnation.com/business-articles/9067/1/relocating-company-state.htm#j8EyCXA0V378Xhxy.99

 

To make your choice, consider the following factors:

  • Ongoing state fees. If you maintain the old corporation and register to do business in a new state, you must pay duplicative annual report and/or franchise taxes. You’ll pay both a fee to your old state and a fee to the new one.
  • Federal tax issues. Liquidation may result in income taxes to the corporation and its shareholders. For example, when a C corporation with appreciated assets liquidates, it must recognize income. Shareholders who receive assets upon liquidation also recognize income if their stock has appreciated. Since S corporations are “pass-through” entities, there may be no immediate cost to the corporation or its shareholders.
  • Reorganization. For a C corporation, this can be entirely tax-free. There is no tax on the merger of the old corporation into the new one. It’s as if there had been no change for federal tax purposes, but the merged corporation does cease to exist in its original state. [bizfilings.com]
  • Dissolution costs. If you dissolve your business—whether C corporation or S corporation—and either form a new one or merge it into a new corporation, you must go through the formalities of dissolving the old one. The specifics depend on the state where you had the old corporation. Generally, it requires document preparation (dissolution papers or forms), a filing with the old state and paying any outstanding taxes and dissolution fees.

 

 

Customer: replied 11 months ago.


Thank you, but I can not read the middle of an answer because it looks like there is double typing over it. Can you resend?

Expert:  Law Pro replied 11 months ago.

If you move your corporation to a new state, you have one of three options:

 

1) continue as a corporation in the old state and register as a foreign corporation doing business in the new state;

 

2) dissolve the corporation in the old state and form a corporation in the new state; or

 

3) do a reorganization, where a corporation is formed in the new state and the old corporation is merged into it. If you use a reorganization, you can continue to use your employer identification number (EIN) for the newly merged company. Also, the corporation continues to use the same basis and holding periods for its equipment and other assets. In effect, it’s as if there had been no change for federal tax purposes, but the merged corporation does cease to exist in its original state

 

 



If you use a reorganization, you can continue to use your employer identification number (EIN) for the newly merged company. Also, the corporation continues to use the same basis and holding periods for its equipment and other assets. In effect, it’s as if there had been no change for federal tax purposes, but the merged corporation does cease to exist in its original state.

do a reorganization, where a corporation is formed in the new state and the old corporation is merged into it. If you use a reorganization, you can continue to use your employer identification number (EIN) for the newly merged company. Also, the corporation continues to use the same basis and holding periods for its equipment and other assets. In effect, it’s as if there had been no change for federal tax purposes, but the merged corporation does cease to exist in its original state
If you use a reorganization, you can continue to use your employer identification number (EIN) for the newly merged company. Also, the corporation continues to use the same basis and holding periods for its equipment and other assets. In effect, it’s as if there had been no change for federal tax purposes, but the merged corporation does cease to exist in its original state.

To make your choice, consider the following factors:

Ongoing state fees. If you maintain the old corporation and register to do business in a new state, you must pay duplicative annual report and/or franchise taxes. You’ll pay both a fee to your old state and a fee to the new one.
Federal tax issues. Liquidation may result in income taxes to the corporation and its shareholders. For example, when a C corporation with appreciated assets liquidates, it must recognize income. Shareholders who receive assets upon liquidation also recognize income if their stock has appreciated. Since S corporations are “pass-through” entities, there may be no immediate cost to the corporation or its shareholders.
Reorganization. For a C corporation, this can be entirely tax-free. There is no tax on the merger of the old corporation into the new one. It’s as if there had been no change for federal tax purposes, but the merged corporation does cease to exist in its original state. [bizfilings.com]
Dissolution costs. If you dissolve your business—whether C corporation or S corporation—and either form a new one or merge it into a new corporation, you must go through the formalities of dissolving the old one. The specifics depend on the state where you had the old corporation. Generally, it requires document preparation (dissolution papers or forms), a filing with the old state and paying any outstanding taxes and dissolution fees.



Customer: replied 11 months ago.


The reorganization sounds best for me. Can I still do that even though I registered in the new state as a foreign business. Total I am registered as a foreign corp in two states besides my home state. Could you point me in the direction of where I can find the paperwork to do the reorganization. Also, I am the one that asked the other question you are helping me on. So would I be able to change the owner as well in this reorganization to my husband.

Expert:  Law Pro replied 11 months ago.
What state are you moving the corporation to?

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