I’m getting ready to move from NY to NC and I’m trying to figure out the easiest and/or cheapest way to get my LLC from NY to NC. I believe I have to form a new LLC in NC, and then do a merger, but I’m concerned that if I do it myself I’ll miss something in the details. Anyone done this?
I’ve done a few similar moves and it depends on the state. Sometimes you can redomocile the company by creating a new entity in the new state as a ‘continued’ or redomociled company than dissolving the first one. Sometimes you have to create a new company, then merge. The problem with the merging is that it can screw up your tax situation and may have no real benefit. We moved an LLC from Louisiana to NY and found that the only benefit we’d get from actually moving it would be that we’d keep the EIN. That wasn’t a big deal so we created a new entity in NY, had the LA entity sell all of it’s assets to the NY entity and dissolved the LA entity. In another situation, we moved a CA s-corp to Nevada. We wanted to keep the EIN since we had payroll, 401k, etc and wanted a smooth move. In NV you can redomocile so that’s what we did, but it got a bit confusing tax-wise during the first year.
So, I guess it depends on whether you really need to move the company and what the local laws are. It’s not all that hard, and it’s mainly about taxes (as usual).
Thanks for the info. It would be helpful to keep the EIN the same, and I want to avoid tax issues too. I spoke to the two states this morning and NC said I can file an Articles of Organization w/included Articles of Conversion for $125 and do it in one step on their end. NY told me I could file an Articles of Dissolution on their end for $60. That all seems easy enough. Then the only question is if I can keep my EIN if I do it this way, vs. forming the LLC in NC, and then filing Articles of Merger with both… which would obviously cost more and take more steps. But I am pretty sure that way would let me keep the EIN.
OK, this isn’t going to be as bad as I thought.
For NC, I can file a form L-01A Articles of Organization including Articles of Conversion for $125.
For NY, I would then file an Articles of Dissilution for $60.
Then I need to file an IRS form 8822 Change of Address and attach a copy of the L-01A from NC and I’m done. Same EIN and new location.
Anyone see a problem with this approach. This was what I came up with after talking to the three governement entities.
If that’s the case, you probably CAN keep the EIN, yes. Remember that the EIN is issued by the fed, not either of the states. So you can use the EIN in the new state for the newly created entity (the converted one) rather than applying for a new one. The, you file a single form with the IRS and they’ll essentially ‘transfer’ the EIN from the old company to the new one.
Be SURE to check with your accountant on this one - there are a few tricks. The new company can’t PAY anyone until the EIN is transferred, or else they have to get a new EIN for themselves (even if temporary), and the dissolution dates have to be correct for it all to work. Also, you need to make sure that your final tax returns are done correctly so that the dissolution goes smoother.
From my experience, New York is really difficult about this kind of stuff so make sure your paperwork is in order! This is also a great time to convert to an s-Corp so you might want to check into that and see if you’d save tax money that way. In many states it’s worthwhile, many not, depending on your business.
Thanks for the info. I’m thinking if I converted to S-Corp, I’d have to get a new EIN since the company name would have to change (no LLC in it). I’m just single member LLC and I file my taxes with the LLC all together with my personal return, so I’m not sure that the S-Corp would be worth the hassle at this point. I kind of want this to be as transparent as possible. Sounds like three forms and $185 and I’m in business. I have filed things with NY a few times… some changes, and the formation of a DBA under the LLC. I know that its hard to get everything right with them, but I’ve been through their forms a few times and they seem relatively simple for this. Its not that big of an issue on the dates because I don’t have any daily stuff going on that would be that difficult to deal with. I will just need to get my sales tax stuff established in NC… forgot about that until just now. It has to be easier to deal with than NY that does it by county.