Thank you for your questions, Scott. I will be happy to attempt to assist you with this relocation.
You are correct that the first option is the most complicated. It involved a transfer from an old entity to a new entity, a new EIN, and far more paperwork and complexity then you really need to pursue especially if you are not trying to change anything fundamentally but where the entity is going to be domesticated. The 2nd option is indeed the most straightforward. You would need to file for incorporation and for reserving your name within the state. NC does permit for S-Corps so you really do not need to refile unless you wish to do so. Then just file articles of dissolution in California, make sure to pay all fees and taxes if any, and you are free to conduct business in the new state. An S-Corp conversion makes sense if you expect to sell or transfer your business at some point or expect your profits to go above $300,000--otherwise an S-Corp generally has more favorable tax implications.
Hope that helps.
Thank you, Dimitry.
The form that the SoC of NC sent me was simply:
ARTICLES OF INCORPORATION INCLUDING ARTICLES OF CONVERSION
...but without any explanation.
You mention I need to file for incorporation in NC and for reserving the company name - do I need to do this before filing this conversion form? At the same time? Or does this form cover it all, in effect?
Part 2 of that -- if I complete this form, is my company (the "converting business entity") classified as a "foreign corporation"? I'm assuming yes, since the other options listed are all LLC variants.
Thank you for your follow-up. You generally have to reserve your name before you file for incorporation. Do a business entity check to make sure that the name you wish to take on is available. In terms of this form, the company is considered foreign until the conversion takes place--the conversion is a domestication from one state to another. Once you convert your entity to NC, and dissolve the California entity, you can file articles of amendment and domesticate your entity, and in process it turn into domestic rather than a foreign entity.
Hope that helps!
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).