How to Move an LLC to Virginia
This article discusses the process for moving an LLC to Virginia, but that process is only available if also allowed by the laws of the state that the LLC is moving from. Click the button below for a free analysis of the law of both states. If domestication is allowed, the tool will outline the steps that must be taken to move the LLC to Virginia and provide a no-obligation cost estimate.
There are many reasons why a business owner may want to move an LLC to Virginia. This article discusses the use of domestication, known in some states as LLC conversion, to transfer an LLC to Virginia.
What is Virginia LLC Domestication?
Virginia domestication is a legal procedure that changes an out-of-state LLC’s legal home state—its state of formation or domicile—to Virginia.1 An LLC that completes a Virginia LLC domestication becomes a Virginia LLC primarily governed by the Virginia Limited Liability Company Act.2 Otherwise, it remains the same company—with the same history and the same original formation date—throughout the domestication process.3
Business owners may decide to domesticate an out-of-state (or foreign) LLC to Virginia because they are relocating the company’s main office. Or, they may decide to move the LLC’s headquarters to Virginia as part of a domestication. However, physical relocation is not a necessary part of a Virginia LLC domestication. A business can domesticate into Virginia but leave its principal office in another state.
Virginia LLC Domestication vs. Virginia LLC Conversion
Not all states authorize LLC domestications, and not every state that does uses the name domestication. Some states authorize one statutory procedure—called a conversion—that can change an LLC’s domicile or change its entity form (e.g., conversion from an LLC into a corporation).4
Virginia law distinguishes between LLC domestications and LLC conversions and authorizes two distinct procedures. A Virginia conversion changes a business’s entity form, and a Virginia domestication changes its state of formation. For example, a Virginia LLC can complete a conversion to become a corporation, or an out-of-state LLC can complete a Virginia domestication to become a Virginia LLC.5
Why Transfer an LLC to Virginia?
Owners may choose to transfer an LLC to a new state for multiple reasons. Businesses sometimes pick Virginia to take advantage of its favorable geography. Virginia-based companies are nearby several large markets and have access to key transportation routes. Common motivations for changing an out-of-state LLC’s legal home to Virginia include the following:
- It’s convenient for owners who move. Changing an LLC’s domicile may be more convenient for business owners who move to a new state. An LLC owner who moves to Virginia may prefer that the business be governed by the owner’s new home state. If an LLC’s state of formation is the same as its physical location, administration may be less time-consuming. And a Virginia LLC could enjoy simpler interactions with state government agencies in Virginia.
- Domestication to Virginia results in less paperwork and annual fees. An out-of-state LLC that domesticates to Virginia may decrease its annual reporting obligations and costs. A company that operates mostly in Virginia but is organized in Washington, D.C. probably pays annual fees in both places. The business may save money if a Virginia domestication cuts out the annual fees in D.C. Virginia charges LLCs a $50.00 annual registration fee but does not require annual reports, so a Virginia domestication could end the LLC’s annual reporting burden altogether.6
- Virginia business laws work well for the company. A domesticating LLC may see legal advantages of a move to Virginia. The state government in Richmond offers a variety of tax credits and grants to help small businesses—along with tax incentives for employers. Or, Virginia’s Limited Liability Company Act may be a better fit for a company. For example, a business that wants to use the series LLC model may decide to move to Virginia if its current state does not authorize series LLCs.
- Domestication helps build the business’s professional network. Virginia has a reputation for a highly educated workforce due to its proximity to the nation’s capital and Virginia’s well-regarded universities. An LLC that domesticates to Virginia may find it easier to locate qualified professionals nearby. For example, a Virginia LLC should have little difficulty hiring attorneys and accountants with expertise in Virginia law. This may bring networking advantages and help the owners form long-term business relationships with local professionals.
- Domestication results in tax savings. Virginia is an average state for business taxes but is considered a high-tax state overall. Still, an LLC that domesticates to Virginia may lower its tax burden if it is no longer taxed by the old state. A state can tax a business if it has a sufficient connection—called a taxable nexus—to the state. An LLC that domesticates to Virginia creates a taxable nexus with Virginia but may also sever the taxable nexus with the old state—especially if the LLC does little business there. In that scenario, the LLC may reduce its overall tax burden if it no longer has to pay taxes to the old state. If the LLC is coming from New York, New Jersey, or another very high-tax state, there could be substantial tax savings.
Need to find out what it will take to move your LLC to Virginia?
The Virginia domestication process depends on the requirements of two sets of state laws. We have developed a streamlined system to efficiently transfer LLCs to Virginia. Click the button below to get an overview of the process.
What are the Benefits of Virginia LLC Domestication?
For most out-of-state LLCs, the Virginia LLC domestication process is the simplest and least costly way to officially move to Virginia. The advantages of domestication over other potential options include:
- The LLC keeps the same identity. A domesticating LLC is still the same company after completing the process.7 It keeps its taxpayer history and continues using the same Employer Identification Number (EIN). This feature reduces the administrative burden of changing states.
- The LLC owns the same assets. The out-of-state LLC does not have to transfer its property to the Virginia LLC. The same company still owns all the same assets, so deeds and asset assignments are unnecessary.8 The LLC can also keep the same bank accounts throughout a Virginia LLC domestication.
- Business contracts are still effective. A domesticating LLC’s business contracts stay in place—still valid and enforceable. The company has all the same contractual rights and obligations, and there is no need to negotiate new agreements.
- Day-to-day operations are unaffected. An out-of-state LLC that domesticates to Virginia can continue business as usual during the process. There is no need to temporarily close or release employees. So, the company can continue earning money, and employer-employee relationships are unimpaired.
- The LLC is not dissolved in the old state. Moving an existing business to a new state sometimes requires the business to be dissolved in the original state and re-formed in the new state. An out-of-state LLC that domesticates to Virginia avoids dissolution, winding up, or distributing assets. The company can still do business in the former state if it registers there as a foreign LLC. But registration as a foreign LLC is not an essential part of the process.9
What LLCs can Convert to Virginia LLCs?
Not every out-of-state LLC can domesticate to Virginia. The LLC’s current state must authorize LLC domestications, and not all states do. If an out-of-state LLC is currently organized in a state with no LLC domestication statute, the company cannot domesticate to Virginia.10
The current state does not have to actually call the process domestication. Some states use the name conversion. The state just needs to be among the about two-thirds of states with a statutory procedure for changing an LLC’s domicile.
An LLC planning a move to Virginia should also verify that Virginia lets LLCs engage in the company’s type of business. Virginia’s LLC law generally lets LLCs do any legal business that a partnership or corporation can do.11 However, if a separate Virginia statute governing a business activity bars LLCs from the activity, then an out-of-state LLC involved in that field should not domesticate to Virginia.12
Virginia has special rules for LLCs that engage in qualified professional services—which are services that require a license, certification, or other legal authority to provide.13 Examples of professional services include architecture, professional engineering, healing arts, public accounting, and law. Virginia LLCs that provide professional services are called professional limited liability companies (or PLLCs). They are governed by Virginia’s LLC statute and by the Virginia Professional Limited Liability Company Act.14
A PLLC must focus on one professional service—or a combination of certain complementary services—and only provide the services through licensed practitioners. A PLLC’s members must only be individuals with the necessary license or certification.15
An out-of-state business that offers service that require a license in Virginia should ensure that it has all necessary licenses and meets all requirements for Virginia PLLCs before beginning a Virginia domestication.
Need to find out whether Virginia LLC domestication is an option?
Our LLC Domestication Analyzer analyzes both Virginia law and the law of the state that the LLC is moving from. It can help you:
- Find out whether the LLC qualifies to convert to a Virginia LLC
- Get a detailed step-by-step breakdown of the domestication/conversion process based on the laws of both states
- Get a free, no-obligation estimate of the costs involved to move your LLC to Virginia
Click the button below for a free analysis.
How Much Does Virginia LLC Domestication Cost?
An out-of-state LLC that domesticates to Virginia will incur domestication costs. The total amount consists of labor costs paid to the document preparer, filing fees paid to state agencies, and registered agent fees (if the LLC hires one).
A service provider that the LLC hires to prepare domestication documents will charge for its work. The project typically includes organizing information, drafting and filing documents, and communicating with the LLC owners and state agencies. Rates vary by provider and may be a flat fee or an hourly rate (depending on the provider).
The Virginia State Corporation Commission and the current state’s secretary of state or equivalent office will charge filing fees for the domestication documents. Virginia charges total filing fees of $200.00 for out-of-state LLC domestications to Virginia. The total fee amount consists of $100.00 for the Articles of Domestication and $100.00 for the new Virginia Articles of Organization.16
The LLC’s current state will also charge a filing fee for the domestication document filed there. The fee amount depends on the LLC’s current state. Most states charge less for LLCs domesticating out of the state than for LLCs domesticating into the state.
Registered Agent Fees
Virginia requires every LLC to have a registered office in Virginia and a registered agent on file with the State Corporation Commission.17 An LLC’s registered agent has legal authority to accept service of process, official communications, and other legal documents on the company’s behalf. Virginia law requires an LLC’s registered agent to be:
- A Virginia resident who is a member or manager of the company;
- A Virginia resident who is an authorized representative of a business entity that is the LLC’s member or manager;
- A corporation, registered LLP, or LLC (other than the company itself) with authority to do business in Virginia;
- A Virginia resident who is an officer of the LLC and is available to accept service during regular business hours; or
- A Virginia-licensed attorney.18
Virginia LLCs often hire commercial registered agents to standardize service on the company and avoid publishing member or manager information. Because a registered agent must be physically available to receive service, commercial registered agents also avoid disruptions in a member’s or manager’s workday.
Need a price quote?
Our LLC Domestication Analyzer includes a free, no-obligation estimate of the cost of moving your LLC to Virginia. Click the button below for a fee quote.
How Long Does Virginia LLC Domestication Take?
Virginia LLC domestications usually take less time than other methods of changing a business’s state of formation. The total timeframe to complete the process depends largely on the parties’ turnaround time for each step. The primary factors are:
- The business owners’ time to give the document preparer the needed information;
- The document preparer’s time to draft the domestication documents;
- The owners’ and document preparer’s time to circulate documents for review, identify areas for revision (if any), and sign the domestication documents;
- The time to file the domestication documents with state agencies; and
- State agencies’ time to process the filed documents and approve the domestication.
The Virginia State Corporation Commission offers expedited processing for documents filed online. The fee for same-day processing is $200.00. The fee for next-day processing is $50.00 or $100.00. Documents must be filed by 10:00 a.m. for same day processing or by 2:00 p.m. for next-day processing.
What Laws Govern Virginia LLC Domestication?
An out-of-state LLC’s domestication to Virginia needs to follow Virginia law and the LLC’s current state’s law. The LLC must complete all steps that either state calls for. If both states have requirements for an individual step, the LLC must observe both states’ requirements. For example, an out-of-state LLC’s plan of domestication must include all items Virginia requires and all items the current state requires.19
Some aspects of the domestication process are controlled by one state in particular:
- Domestication approval. The LLC’s current state sets the necessary standard for approving the plan of domestication.20
- Virginia filing requirements. Virginia law governs the requirements for domestication documents filed in Virginia.21
- Current state filing requirements. The LLC’s current state’s law determines the requirements for domestication documents filed in the current state.
- Legal effects of domestication. Virginia law defines the legal effects of an LLC domestication to Virginia.22
- Effective date. Virginia law governs the domestication’s effective date.23
What is the Virginia LLC Domestication Process?
The Virginia LLC domestication process consists of two components: document preparation and administrative tasks.
Skillful preparation of the domestication documents is a critical part of a successful Virginia LLC domestication. Each of the documents listed below must meet all relevant requirements of Virginia law and the current state’s law.
- Plan of Domestication. A Plan of Domestication that is designed to comply with the requirements of both Virginia law and the law of the state that the LLC is moving from.
- Virginia Articles of Domestication. The Virginia Articles of Domestication with all information and any related documents needed for filing with the State Corporation Commission of the Commonwealth of Virginia.
- Domestication 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.24
- Virginia Articles of Organization. The Virginia Articles of Organization for filing with the Virginia State Corporation Commission.
- Virginia Operating agreement. A state-specific Operating agreement to properly structure the LLC as a Virginia LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
- Resolution Authorizing Domestication. A resolution approving the transaction and adopting the Virginia organizational documents as the LLC’s governing documents.
Our Virginia LLC domestication service includes each of these documents, as well as explanatory letters and instructions, an operations manual, and related documents needed to complete the Virginia LLC domestication process. Click the button below to find out more.
An out-of-state LLC that is prepared to implement a domestication to Virginia completes the administrative tasks below to make the transfer to Virginia legally effective.
- Conduct preliminary name search. Check the official records of the Virginia State Corporation Commission to determine whether the LLC’s name is available in Virginia. (If the name is unavailable, a slight name change may be required to complete the domestication.)
- Obtain signatures on the Articles of Domestication. The Articles of Domestication must be signed by the required parties. The Virginia State Corporation Commission allows the Articles of Domestication to be e-signed.
- Obtain signatures on the Articles of Organization. The Articles of Organization must be signed by the required parties. The Virginia State Corporation Commission allows the Articles of Organization to be e-signed.
- File the Articles of Domestication. File the Articles of Domestication with the Virginia State Corporation Commission. The State Corporation Commission allows the Articles of Domestication to be e-filed.
- File the Articles of Organization. File the Articles of Organization with the Virginia State Corporation Commission. The State Corporation Commission allows the Articles of Organization to be e-filed. The Articles of Organization is filed with the Articles of Domestication as an attachment.
- File domestication documents with prior state. File the domestication documents with the Secretary of State or equivalent agency for the state that the LLC is moving from.
These tasks are based on the system that we have developed to transfer an LLC from one state to another. We provide you with the option to save money by completing these tasks yourself (using the step-by-step instructions we provide) or hire us to handle everything for you. Click the button below to find out more.
What is the Legal Effect of Virginia LLC Domestication?
A Virginia LLC domestication officially moves the out-of-state LLC to Virginia. Otherwise, the legal impact of a domestication is minor.
Virginia’s domestication law describes the following legal effects of an LLC domestication to Virginia.
- The LLC is the same company. After completing a Virginia LLC domestication, the LLC is the same company that existed in the original state. The date the company came into existence—its date of formation—is still the date that it was formed in the original state.25
- The LLC is a Virginia LLC. An LLC that domesticates to Virginia is a Virginia LLC from the effective date of the domestication.26 That means it is organized under Virginia law and primarily governed by the Virginia Limited Liability Company Act.27 The company’s new Virginia articles of organization—which are attached to the articles of domestication—are binding on the LLC and its members after the domestication.28
- The LLC owns the same assets. The Virginia LLC now owns all real estate and other property that the out-of-state LLC owned before domestication.29 The domestication does not impair or limit the company’s property rights, and there is no need to sign deeds or transfer legal title to other assets.
- The LLC owes the same debts. Any debts or other obligations that the out-of-state LLC had before the domestication become the Virginia LLC’s debts.30 A member of the LLC who was personally liable for company debts or liabilities before domestication remains liable afterwards.31
- Legal cases move forward. Legal or administrative matters brought by or against the out-of-state LLC proceed without interruption—the same as if the domestication did not occur.32
- Members own the same interests. Ownership interests in the out-of-state LLC become ownership interests in the Virginia LLC. Members’ ownership proportions—and their relative rights, preferences, and limitations—are not affected by the conversion.33
- Registration as a foreign LLC is unnecessary. If the out-of-state LLC was registered in Virginia as a foreign LLC, the registration is automatically cancelled when the domestication takes effect.34 This is because there is no need for a Virginia LLC to obtain authorization to transact business as a foreign LLC in Virginia. The Virginia LLC can register as a foreign LLC in its former state if it will do business there, but registration is not mandatory.
- Va. Code § 13.1-1075(A). Virginia also authorizes domestications that transfer Virginia LLCs to a different state. Va. Code § 13.1-1075(B).
- Va. Code § 13.1-1079(A)(5)(a).
- Va. Code §§ 13.1-1079(A)(5)(b)-(c).
- See, e.g., Colo. Rev. Stat. §§ 7-90-201(1)-(2).
- Va. Code §§ 13.1-1082(A)-(B); 13.1-1075(B).
- Va. Code § 13.1-1005.
- Va. Code §§ 13.1-1079(A)(5)(b)-(c).
- Va. Code § 13.1-1079(A)(1).
- See Va. Code § 13.1-1077.
- Va. Code § 13.1-1075(A).
- Va. Code § 13.1-1009(17).
- Va. Code § 13.1-1008.
- Va. Code § 13.1-1102.
- Va. Code §§ 13.1-1100, et. seq.
- Va. Code § 13.1-1102(A). There is an exception for PLLCs that provide architecture, professional engineering, land surveying, landscape architecture, or certified interior design—which must be at least two-thirds owned by licensed members.
- Va. Code § 13.1-1005.
- Va. Code § 13.1-1015(A).
- Va. Code §§ 13.1-1015(A)(2)(a)-(c).
- Va. Code § 13.1-1075(C).
- Va. Code § 13.1-1077(A).
- See Va. Code § 13.1-1077(A).
- Va. Code § 13.1-1075(A). See also Va. Code § 13.1-1075(B) (The legal effects of an LLC domestication from Virginia to another state are governed by the new state’s law).
- Va. Code §§ 13.1-1077; 13.1-1004 (LLC domestication into Virginia takes effect when the State Corporation Commission issues a certificate of domestication or on a delayed effective date up to 15 days later).
- 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).
- Va. Code §§ 13.1-1079(A)(5)(b)-(c).
- Va. Code § 13.1-1079(A)(5)(a).
- Va. Code §§ 13.1-1000, et. seq.
- Va. Code § 13.1-1079(A)(4).
- Va. Code § 13.1-1079(A)(1).
- Va. Code § 13.1-1079(A)(2).
- Va. Code § 13.1-1079(B).
- Va. Code § 13.1-1079(A)(3).
- Va. Code § 13.1-1075(C)(3).
- Va. Code § 13.1-1077.