How to Move Your LLC to Another State: Domestication, Foreign Entity, or New Registration
How to Move Your LLC to Another State
Are you a new or established business looking to move across the country or to another state?
I was just in your shoes, and one of the biggest questions I had, and one I frequently hear from clients is: How do I properly move my LLC from one state to another?
After doing the research and exploring the options for myself, below are the three most common methods to successfully relocate your business to your new home state.
1. Domestication
Domestication sounds fancy, but it simply means registering your business in the new state where you’ll be physically located. Here’s how it works:
- First, make sure your LLC is in good standing in your current state.
- Call the Secretary of State in the new state to confirm whether they allow domestication (not all states do).
- If allowed, you’ll be able to transfer your existing LLC into your new state without creating a brand-new entity.
Why choose domestication?
- You keep your business name.
- You keep your EIN since your original entity continues.
- You maintain your credit history and banking relationships.
This is the best option if you’re planning a long-term move (5+ years) or making your new state your primary residence. If your move is temporary, the foreign entity option may be a better fit.
2. Foreign Entity
Despite the name, a foreign entity doesn’t mean overseas it just means your business is expanding to operate legally in another state.
- Your LLC remains headquartered in your original state.
- You register it as a foreign entity in the new state where you’ll be doing business.
- Your LLC must be in good standing, and you’ll need to make sure your business name is available in the new state.
Why choose a foreign entity?
- Perfect for temporary moves or multi-state business.
- You keep your EIN since your original LLC remains active.
- Simple process (if your business name is available).
Important note: You must register as a foreign entity if your business has:
- W-2 employees in another state
- A physical office in another state
- Or if you yourself are physically operating the business from another state
Many business owners register in Wyoming or Delaware for tax/privacy purposes, but forget they must also register as a foreign entity where they actually live and work.
3. Starting from Scratch
If domestication isn’t an option (some states don’t allow it), or if your business name is taken in the new state, you may have to start fresh:
- Register a brand-new LLC in the new state.
- Apply for a new EIN since it’s a new legal entity.
- Transfer contracts, open new bank accounts, and possibly rebrand.
Pros:
- Opportunity to restructure your business setup (especially for partnerships).
- Clean start if your old business structure no longer fits your goals.
Cons:
- Higher legal and administrative costs.
- More time-consuming (new accounts, contracts, rebranding).
Which Option is Best?
Each option is valid, but it just depends on your unique situation. Personally, I chose the foreign entity route since Chicago will always be home, but I’ve had clients go with domestication or start fresh depending on their needs.
If you’re unsure which path is right for you, Wiggs CPA Tax and Accounting is here to help. We also have lawyers in our network who can assist with the legal steps.
Stay Connected
- Follow @WiggsCPA on social media for tax tips, LLC best practices, and invites to our upcoming webinars.
- Visit WiggsCPA.com to ask a question or schedule your consultation.
At Wiggs CPA Tax and Accounting, we help you stay organized, informed, and prepared. Thanks for reading and we’ll see you in the next blog post.
This blog is for informational purposes only and should not be considered legal advice. Please consult with a qualified CPA or attorney for specific guidance related to your situation.
