Moving your business across the state lines takes time, patience, money, legal expertise, communication, due diligence, and usually a good bit of manual labor. Move your business to another state means juggling many tasks: finding suitable space, applying for tax, coordinating staff, informing customers, obtaining business licenses, and physically making the move. So, you ask: How to Move Your Business to Another State?
Sometimes companies must move from one state to another often to lower the cost of doing business or provide a better quality of life for owners and employees. Moving a business interstate raises many questions, particular questions about legal and regulatory matters.
Then, of course, you have the work of introducing yourself to a new neighborhood. You have to make the business successful in the new location. Also, you have the labor that comes with moving your family and personal belongings.
Things to consider when relocating a business cross-country
You have three options for moving your corporate offices to a new state:
- Continue as a corporation in the old state and register as a foreign corporation doing business in the new state
- Dissolve the corporation in the old state and form a corporation in the new state
- Or, do a reorganization, where a corporation is formed in the new state and the old corporation is merged into it.
To make your choice, consider the following factors:
- Ongoing state fees. If you maintain the old corporation and register to do business in a new state, you must pay duplicative annual report and/or franchise taxes. You’ll pay both a fee to your old state and a fee to the new one.
- Federal tax issues. Liquidation may result in income taxes to the corporation and its shareholders.
- For a C corporation, this can be entirely tax-free. There is no tax on the merger of the old corporation into the new one.
Liquidation may result in income taxes to the corporation and its shareholders.
- Dissolution costs. If you dissolve your business either form a new one or merge it into a new corporation, you must go through the formalities of dissolving the old one. The specifics depend on the state where you had the old corporation. Generally, it requires document preparation, a filing with the old state and paying any outstanding taxes and dissolution fees.
How to move your business to another state?
Moving your business is a complex decision. You must consider the costs, legal entity changes, and possible relocation of employees – and yourself! The legal type of your business will dictate how you make this change.
Choose a site for your relocation. Taking into account neighborhood demographics, available space, expansion plans, logistical needs and government policies. Do your research online before undertaking an expensive series of trips to scope out potential locations in person.
How to transfer business ownership? Consult with an attorney for advice and perspective.
This legal expense is essential to avoiding catastrophic missteps that could leave you out of job for months after you move your business to another state, if not entirely. An attorney can help you with many issues and he/she can help you save a lot of money and taxes.
What about licenses and permits?
Moving a business involves almost the same legal and regulatory steps as starting a business, including obtaining the right business licenses and permits. Even if you intend to work from home, you’ll still need a home occupancy permit and a professional business license from your county.
How to Choose the Best Location for Your Business?
Most businesses choose a USA location that will provide exposure and drive foot traffic or volume to their location. Also, it is important the reputation of the neighborhood and the proximity of other businesses. Factors that you should consider when you are moving your business: Competition, Plan for future growth, Proximity to suppliers, Safety, and Brand image.
Gather Your Team
For medium to large offices, someone from each department should coordinate their particular area.
It could be assigned to the department supervisor or manager who can then ensure that each employee takes responsibility for packing their desk, files, and personal items. For smaller offices, you may be on your own. If so, identify a few key people who may be able to help with coordinating the move.
Gather your team to help you move your business to another state
Determine Your Budget
If you have a specific budget amount assigned for your move, it will be important to identify costs before you hire movers, or even before you pack the first box.
Hire the Movers
There are moving companies that specialize in cross-country office moves. Just make sure you do your research, ask the right questions, and have the company come to your office to assess your move. Like any household move, you need to make sure the company is reliable and that you are receiving the best service for the cost.
Make a Contact List
You’ll need to make sure that everyone you do business with, both suppliers and clients, know that you’re moving.
Business Type and States
If you move your business to another state, you have several options for doing it. Every business type has specific rules for moving. Sole proprietorship, corporation, LLC, and partnership, all these business types are different for moving to a new state.
- A sole proprietorship is same as the business owner. If the owner moves to another state, the owner simply informs the IRS of the move. There is no separate paperwork necessary to move a sole proprietorship to another state.
- An LLC may also be registered in one or more other states in which it does business, as a foreign LLC. The regulations for domestic and foreign LLCs vary by state. There may be tax consequences involved with moving a multiple-member LLC to a new state.
- Limited liability companies that relocate have more options: Continue the LLC or Liquidate the LLC. Also, form an LLC in the new state and have membership interests from the original LLC, and Form an LLC in the new state and merge the existing LLC into it.
- Partnerships, like LLCs, have multiple partners whose interests would have to be considered in setting up a new partnership in another state.
Moving an online business
Your online business has no boundaries in terms of where you can do business. If you do move your business, you must comply with the laws that apply in your new state. So, even if your online business remains the same, you still need to legally move your business entity.
To move your business to another state is very important decision so it requires precise planning and research. Good luck!