An entity has three choices to conduct business in order to conduct business in the other state:
- Move company from one state to another and use the same employer identification number and transfer the company's age as well.
- Create a foreign entity and use same E.I.N number, but maintain both the states regardless of active or inactive business.
- Dissolve company and create a new domestic company where the owners are moving.
Domesticating involves the "transfer/move/domicile" of an existing corporation to a new jurisdiction. If you are planning to relocate your business outside of the State within which you are now incorporated, you may want to domesticate.
You also have an option of merely dissolving the existing corporation and re-incorporating in your new home state, Domestication may be the more attractive alternative. This is because Domestication allows you to retain or save the "age" of the corporation, which may be important if you want to keep your existing Federal Tax Identification Number, corporate bank accounts and lines of credit. In addition, retaining the "age" of the corporation may be useful if you are applying for new lines of credit and/or special government exemptions.
While the domestication process is usually straightforward, it is important that the entity seeking domestication consult with its business consultants and greater business advising team through the process. Questions of compliance with foreign law and internal governing documents come into play through the domestication process.
Note: List of the States that Allow the Article of Domestication and Article of Conversion
