How to Move an LLC to Florida

There are many reasons why a business owner may want to move an LLC to Florida. This article discusses the use of conversion, known in some states as LLC domestication, to transfer an LLC to Florida.

What is Florida LLC Conversion?

Florida conversion is a legal process for an LLC formed in another state to officially relocate to Florida. Florida law allows conversions into and out of Florida. As long as the other state allows conversion, an out-of-state LLC may convert to a Florida LLC, and a Florida LLC may convert to an out-of-state LLC.¹

Conversion changes the LLC’s state of organization—also called its domicile—which is the state whose governing law applies to the LLC. An out-of-state LLC that converts to Florida becomes a Florida LLC governed by the Florida Revised Limited Liability Company Act. Fla. Stat. §§ 605.0101, et. seq. The law of the prior state no longer governs the LLC.

Many states use the term LLC domestication to describe the statutory procedure that lets an LLC change its state of organization. A Florida domestication moves a business entity that was formed internationally (a non-United States entity) to Florida.² For example, domestication could change a Mexico Limited Liability Company (called a Sociedad de Responsabilidad Limitada (S.de R.L.) in Spanish) to a Florida LLC.

A Florida LLC conversion can change either an LLC’s state of organization or its entity type (LLC to corporation, for example). This article discusses the process for converting an out-of-state LLC to a Florida LLC.

Why Transfer an LLC to Florida?

When one or more LLC members move to a different state, they often want to bring their LLC with them. For these members, Florida LLC conversion has several benefits:

• Convenience and familiarity to local professionals. LLC members that live in Florida often want to use Florida professionals—including accountants, attorneys, or contractors—to help with the business. Having a Florida LLC allows the owners to use professionals that live in Florida and are familiar with Florida LLC law. Florida-based business owners may also find that communicating with state government offices—when necessary—is more convenient if the business is a Florida LLC.
• Avoiding multiple filings. An LLC that is formed in one state but does business in another often must keep up with two sets of registration requirements. It must file with its formation state and with the state where it does business. LLC members who relocate to Florida may avoid the need to file in the original formation state by converting the LLC to Florida.
• Advancing business objectives. An out-of-state LLC’s owners may want Florida law to govern the business even if the owners do not live in Florida. Florida has an attractive legal climate for many businesses. A Florida LLC conversion can be a smart decision if the laws in Florida better complement the owners’ goals than the laws in the LLC’s current state.
• Tax savings. An LLC that converts to Florida may save on its overall tax bill if the company no longer has a sufficient taxable connection—or nexus—to the former state. Florida is generally considered a low-tax state and has no state individual income tax. So, owners who move to Florida and the business itself may both save on taxes by converting to Florida.

What Are the Benefits of Florida LLC Conversion?

Florida LLC conversion is a relatively seamless process—with no disruption to business operations. The LLC conversion process has multiple benefits compared to other methods of formally moving a business to another state:

• The LLC’s identity and EIN are consistent before and after conversion. An out-of-state LLC converting to a Florida LLC is the same entity throughout the process. It retains its commercial identity and its Employer Identification Number (EIN). The consistency avoids administrative and bureaucratic headaches.³
• The LLC’s bank accounts and other assets are not affected. A converting LLC retains all its assets throughout the conversion process.⁴ The LLC need not close existing accounts and open new ones—though it can switch to a Florida-based bank if it chooses.
• The LLC’s contracts stay in place. Conversion does not invalidate or interfere with contracts from before the conversion. Existing contracts are still legally effective and enforceable after conversion.⁵
• The LLC’s operations are not interrupted. A converting LLC can continue doing business as normal during and after conversion. Conversion does not impact day-to-day operations unless the owners decide otherwise in their plan of conversion.
• The LLC need not dissolve in its original state. Florida LLC conversion does not trigger dissolution, liquidation, or winding up of the LLC.⁶ Distribution of LLC assets is not part of the conversion process unless the LLC’s operating agreement or plan of conversion expressly call for distribution.
• Registration as a foreign LLC is not required. An out-of-state LLC that converts to Florida need not register as a foreign LLC in the former state unless the LLC will continue doing business there.

What LLCs Can Convert to Florida LLCs?

Not every out-of-state LLC can convert to a Florida LLC. The current state’s law must authorize LLC conversions—sometimes called domestication by other states.⁷ An LLC organized in a state that does not allow LLC conversions cannot convert to Florida.

An LLC with governing documents—such as its articles of organization or operating agreement— that restrict conversion should formally amend the governing documents before proceeding with the conversion.

How Much Does Florida LLC Conversion Cost?

An out-of-state LLC incurs costs when moving to Florida—though the cost for an LLC conversion is usually lower than alternative means of changing a company’s state of formation. The total expense for converting to Florida includes amounts paid for the document preparer’s services, filing fees paid to the Division of Corporations, and (if applicable) registered agent fees.

• Labor costs. Labor costs are the amounts charged by the service provider that the LLC hires to manage the conversion. Precise amounts depend on the provider’s rates and may vary according to the complexity of the specific conversion.
• Filing fees. The Florida Division of Corporations—a branch of the Department of State—charges filing fees when accepting most filed documents. The filing fees for an out-of-state LLC converting to Florida total $150.00—which consists of $25.00 for the articles of conversion and $125.00 for the articles of organization. The LLC’s original state usually charges its own filing fee, also.
• Registered agent fees. A Florida LLC or an out-of-state LLC that does business in Florida must name a registered agent with a presence in Florida authorized to accept service for the LLC.⁸ Registered agent fees depend on whether an LLC hires a commercial registered agent to accept service on its behalf. Registered agent rates in Florida are typically around $100.00 per year. Florida LLCs often opt to hire commercial registered agents for consistency and convenience.

How Long Does Florida LLC Conversion Take?

Florida LLC conversion is a multi-step process that takes time to complete. The time necessary to move an out-of-state LLC to Florida depends in part on:

• The document preparer’s time to gather necessary information and prepare conversion documents;
• Members’ and managers’ time to decide on conversion terms, review and approve drafts, and sign the final conversion documents; and
• The Florida Division of Corporations’ time to process the filed conversion documents.

What Laws Govern Florida LLC Conversion?

For an out-of-state LLC to convert to a Florida LLC, the law of the other state must permit conversion—called domestication in some states.⁹ Assuming the other state allows conversion (not all do), the conversion process must comply with both states’ laws. The current state’s laws control the plan of domestication, the standard for approving the conversion, and the filings necessary in that state.¹⁰ Florida law governs the process in general, documents filed in Florida, and the conversion’s effective date.¹¹

The need to comply with two sets of laws—many of which use different terminology and procedures—adds complexity to the domestication process.

What is the Florida LLC Conversion Process?

The Florida LLC conversion process consists of two components: document preparation and administrative tasks.

Document Preparation

The Florida LLC conversion process requires a series of documents—including a plan of conversion, articles of conversion, and articles of organization—to be prepared and filed in a specific sequence. Our LLC domestication checklist provides more information on the general process for moving an LLC to a new state.

• Plan of Conversion. A Plan of Conversion that is designed to comply with the requirements of both Florida law and the law of the state that the LLC is moving from.
• Florida Articles of Conversion. The Florida Articles of Conversion with all information and any related documents needed for filing with the Division of Corporations of the Department of State.
• Conversion Document for Filing in Prior State. Depending on state law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, statement of conversion, certificate of conversion, or a similar term.¹²
• Florida Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as a Florida , provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution Authorizing Conversion. A resolution approving the transaction and adopting the Florida organizational documents as the LLC’s governing documents.

Administrative Tasks

After creating and approving necessary documents, the LLC must complete several administrative tasks—including signing and filing documents—to make the conversion legally effective.

• Conduct preliminary name search. Check the official records of Division of Corporations of the Department of State to determine whether the LLC’s name is available in Florida. (If the name is unavailable, a slight name change may be required to complete the conversion.)
• Obtain signatures on the Articles of Conversion. The Articles of Conversion must be signed by the required parties. The Division of Corporations of the Department of State requires a manual (wet) signature on the Articles of Conversion (no e-signing).
• File the Articles of Conversion. File the Articles of Conversion with the Division of Corporations of the Department of State. The Division of Corporations requires the Articles of Conversion to be filed by mail or in person (no e-filing).
• File conversion documents with prior state. File the conversion documents with the Secretary of State or equivalent agency for the state that the LLC is moving from.

What is the Legal Effect of Florida LLC Conversion?

Converting an out-of-state LLC to a Florida LLC is a streamlined process. After the conversion, the LLC is governed by Florida law, without any interruption to business operations or LLC existence. The LLC is still the same entity; only its governing law changes.¹³

Florida LLC conversion has the following effects:

• LLC property remains LLC property. All property of the out-of-state LLC remains vested in the Florida LLC. There is no need to create deeds or other documents transferring property from one LLC to another.
• LLC debts remain LLC cebts. All debts, obligations, and other liabilities of the out-of-state LLC continue as debts, obligations, and other liabilities of the Florida LLC. The LLC owes what it owed before the conversion, and the LLC’s creditors have the same rights that they had before the conversion.
• LLC powers remain LLC powers. Unless the plan of conversion provides otherwise (which would be unusual), the out-of-state LLC’s rights, privileges, immunities, powers, and purposes remain in the Florida LLC after conversion.
• LLC members remain LLC members. The membership interests in the out-of-state LLC are converted to membership interests in the Florida LLC.
• New LLC replaces old LLC in legal proceedings. A converting LLC remains a party to any legal cases in which it is involved before the conversion. If the conversion results in a name change, the name of the Florida LLC may be substituted for the name of the out-of-state LLC in any pending legal action or proceeding.
• Florida LLC governing documents become effective. The Florida LLC’s organic rules become effective when the conversion is completed. The organic rules are the documents that govern the LLC—including the articles of organization and operating agreement.¹⁴

A Florida LLC conversion’s legal effects promote consistency throughout the process. The LLC changes its state of organization without disrupting the day-to-day operations of the business or the rights of the LLC, its members, or its managers.

1. Fla. Stat. § 605.1041(1) and (3).
2. Fla. Stat. § 605.0102(22).
3. Fla. Stat. § 605.1046(1)(a)(2).
4. Fla. Stat. § 605.1046(1)(b).
5. Fla. Stat. § 605.1046(1)(c – d).
6. Fla. Stat. § 605.1046(2) and (7).
7. Fla. Stat. § 605.1041(3).
8. Fla. Stat. § 605.0113.
9. Fla. Stat. § 605.1041(3).
10. Fla. Stat. § 605.1043.
11. Fla. Stat. § 605.1045(4).
12. Fourteen states use the term articles of domestication to refer to the document that must be filed with the state to approve the domestication: Iowa, Massachusetts, Minnesota, Nebraska, New Hampshire, New Jersey, North Dakota, South Dakota, Utah, Vermont, Virginia, Wisconsin, Wyoming, and Indiana. The corresponding document may be called a statement of domestication (Alaska, Arizona, Connecticut, Idaho, Illinois, Mississippi, and Pennsylvania); articles of conversion (Florida, Nevada, North Carolina, Oregon, and Washington) or certificate of conversion (California, Delaware, Georgia, Michigan, Ohio, and Texas). It may also be called a statement of conversion (Colorado, Maine), certificate of domestication (Kansas), request for conversion (Louisiana), or statement/plan of domestication (District of Columbia).
13. Fla. Stat. § 605.1046(1)(a).
14. Fla. Stat. § 605.1046(1).