Reorganization moves an LLC to a new state through two separate transactions: forming a new LLC in the destination state, then merging the original LLC into it. The new LLC survives the merger and continues with all assets, contracts, and obligations of the original.
This process works regardless of whether either state has a domestication statute. It requires more documents and more steps than statutory domestication, but it achieves the same result: an LLC governed by the new state’s laws, with the prior-state LLC terminated.
Form the New LLC
The first step is to form a new LLC in the destination state by filing articles of organization with the inbound state’s filing office. This LLC is formed as a shell—it has no assets or operations at the outset. Its sole purpose is to receive the original LLC through the merger.
We draft the articles of organization with the merger in mind. The new LLC’s membership structure, governance provisions, and registered agent designation are set up to match what the combined entity will need after the merger closes.
If the destination state requires publication in a local newspaper, we arrange publication and obtain proof of compliance before proceeding.
Plan of Merger
The plan of merger authorizes the original LLC to merge into the newly formed LLC. It specifies that the new LLC will survive, defines how membership interests in the original LLC convert into membership interests in the surviving LLC, and sets out the terms under which the merger takes effect.
The plan must satisfy the merger statutes of both states. Those statutes differ. There is no universal form. Each plan of merger must be drafted specifically for the two states involved and the structure of both LLCs.
An incorrectly drafted plan of merger can cause the merger to be rejected, expose the surviving LLC to legal challenges, or leave the transaction without valid authorization—putting contracts, ownership, and ongoing operations at risk.
Merger Filings
The merger requires filings with both state agencies.
- The inbound-state merger filing confirms that the new LLC has absorbed the original LLC and will continue as the surviving entity with all rights, assets, and obligations of both constituent LLCs.
- The outbound-state merger filing terminates the original LLC’s existence. It confirms that the merger was properly authorized and that the original LLC has merged out of the prior state into the surviving entity.
Once both states accept the merger filings, the original LLC ceases to exist. The new LLC continues as the sole surviving entity.
Proper Authorization
A merger requires approval from both LLCs. The members of the original LLC and the members of the newly formed LLC (typically the same people) must sign the plan of merger. Unsigned copies of all documents to be filed are attached to the plan so the authorization clearly identifies what is being approved.
Filing Sequence
We sequence the merger filings to protect the LLC. The filings are submitted in an order designed to ensure that the business is never left in limbo—claimed by both states or recognized by neither.
After the State Filings Are Complete
Once both states accept the filings, the reorganization is complete at the state level. The final step—updating IRS records—is covered in our main guide.
Effect on Your EIN
Reorganization creates a new LLC and merges the original into it. Whether the EIN carries forward depends on the LLC’s federal tax classification.
- For multi-member LLCs taxed as partnerships, the EIN typically continues when the new LLC is formed as a shell and the same owners hold 100% of both entities. The IRS treats the surviving LLC as a continuation of the original partnership.
- For single-member LLCs without employees, the EIN question is usually straightforward. The IRS treats single-member LLCs as disregarded entities for income tax purposes, so federal tax reporting already runs through the owner’s Social Security number or individual taxpayer identification number—not the LLC’s EIN.
- For single-member LLCs with employees, the analysis changes. The IRS treats the LLC as a separate entity for payroll tax purposes, even though it is disregarded for income tax. Because the merger creates a new surviving LLC, that new LLC may need its own EIN for payroll filings.
- For LLCs that have elected S corporation tax status, the EIN analysis follows corporate rules. Structure matters. With proper structuring, the EIN typically carries forward.
We structure every reorganization to support EIN continuity where possible. See our article on EIN considerations when moving an LLC.