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Feb
16 • 2021
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Redomestication Matrix

As remote work has become more popular, many people are moving out of state, along with their business entities. We’ve previously written about why forming a corporation or LLC in Delaware is the best choice for clients considering a move (see, Why Delaware is the best choice for actors and creatives), but what if your clients’ entity is already formed and they are leaving the state?

Redomestication is the process by which a corporation or LLC changes its domestic jurisdiction to another jurisdiction.  Some states permit a “conversion” while other states do not.  In states where a conversion is not permitted, there are two options: 1) dissolve the original entity and form a new entity in the new jurisdiction; or 2) form a new entity and then merge the old entity into the new entity.  The following chart describes the redomestication process for California, New York, Delaware, Nevada, Texas, Tennessee, and Florida entities.

Converting From
 Converting to —->
Domestic Corporation Domestic LLC Foreign Corporation Foreign LLC
California Corporation n/a While this situation is not common, it is permissble under the California Corporations Code Domestic corporations may not convert out of California under the California Corporations Code. Instead, a new corporation must be formed in the ulitmate jurisidction and the California corporation must be merged into it. Domestic corporations may not convert out of California under the California Corporations Code. Instead, a new corporation must be formed in the ulitmate jurisidction and the California corporation must be merged into it.
Can you retain the FEIN of the original entity? n/a Yes, the corporations FEIN would apply to the coverted entity No, the FEIN of the surviving corporation of the merger would be used No, the FEIN of the surviving corporation of the merger would be used
California LLC California allows domestic LLCs to convert to domestic Corporations. n/a California allows domestic LLCs to convert to foreign corporations, so long as the resulting jurisdiction also allows it. California allows domestic LLCs to convert to foreign LLCs, so long as the resulting jurisdiction also allows it.
Can you retain the FEIN Yes, the LLCs FEIN would apply to the coverted entity Yes, the LLCs FEIN would apply to the coverted entity Yes, the LLCs FEIN would apply to the coverted entity Yes, the LLCs FEIN would apply to the coverted entity
Delaware Corporation n/a Delaware allows all for-profit entities to convert to domestic LLC Delaware allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it. Delaware allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it
Can you retain the FEIN? n/a Yes, the original corporation’s FEIN would apply to the coverted entity Yes, the original corporation’s FEIN would apply to the coverted entity Yes, the original corporation’s FEIN would apply to the coverted entity
Delaware LLC Delaware allows all for-profit entities to convert to domestic corporations n/a Delaware allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it Delaware allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it
Can you retain the FEIN? Yes, the original LLC’s FEIN would apply to the coverted entity n/a Yes, the original LLC’s FEIN would apply to the coverted entity Yes, the original LLC’s FEIN would apply to the coverted entity
New York Corporation n/a New York does allow any conversions. Instead, a new domestic LLC must be formed first and then the domestic corporation must be merged into it. New York does not allow any conversions. Instead, a new foreign corporation must be formed first and then the domestic corporation must be merged into it. New York does not allow any conversions. Instead, a new foreign LLC must be formed first and then the domestic corporation must be merged into it.
Can you retain the FEIN? n/a No, the FEIN of the surviving corporation of the merger would be used No, the FEIN of the surviving corporation of the merger would be used No, the FEIN of the surviving LLC of the merger would be used
New York LLC New York does allow any conversions. Instead, a new domestic corporation must be formed first and then the domestic LLC must be merged into it. n/a New York does not allow any conversions. Instead, a new corporation must be formed first and then the domestic LLC must be merged into it. New York does not allow any conversions. Instead, a new foreign LLC must be formed first, and then the domestic LLC must be merged into it.
Can you retain the FEIN? No, the FEIN of the surviving corporation of the merger would be used n/a No, the FEIN of the surviving corporation of the merger would be used No, the FEIN of the surviving LLC of the merger would be used
Nevada Corporation n/a Nevada allows all for-profit entities to convert to domestic LLC Nevada allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it. Nevada allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it
Can you retain the FEIN? n/a Yes, the original corporation’s FEIN would apply to the coverted entity Yes, the original corporation’s FEIN would apply to the coverted entity Yes, the original corporation’s FEIN would apply to the coverted entity
Nevada LLC Nevada allows all foreign entities to convert to domestic corporations n/a Neavda allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it Nevada allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it
Can you retain the FEIN? Yes, the original LLC’s FEIN would apply to the coverted entity n/a Yes, the original LLC’s FEIN would apply to the coverted entity Yes, the original LLC’s FEIN would apply to the coverted entity
Texas Corporation n/a Texas allows all for-profit entities to convert to domestic LLC Texas allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it. Texas allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it
Can you retain the FEIN? n/a Yes, the original corporation’s FEIN would apply to the coverted entity Yes, the original corporation’s FEIN would apply to the coverted entity Yes, the original corporation’s FEIN would apply to the coverted entity
Texas LLC Texas allows all for-profit entities to convert to domestic corporations n/a Texas allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it Texas allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it
Can you retain the FEIN? Yes, the original LLC’s FEIN would apply to the coverted entity n/a Yes, the original LLC’s FEIN would apply to the coverted entity Yes, the original LLC’s FEIN would apply to the coverted entity
Tennesse Corporation n/a Tennessee allows for-profit corporations to convert to domestic LLC Tennessee does not allow domestic entities to convert out of Tennessee. Instead, a new foreign corporation must be formed first, and then the domestic LLC must be merged into it. Tennessee does not allow domestic entities to convert out of Tennessee. Instead, a new foreign corporation must be formed first, and then the domestic LLC must be merged into it.
Can you retain the FEIN? n/a Yes, the original corporation’s FEIN would apply to the coverted entity No, the FEIN of the surviving corporation of the merger would be used No, the FEIN of the surviving LLC of the merger would be used
Tennesse LLC Tennessee allows domestic LLCs to convert to domestic corporations. n/a Tennessee does not allow domestic entities to convert out of Tennessee. Instead, a new foreign corporation must be formed first, and then the domestic LLC must be merged into it. Tennessee does not allow domestic entities to convert out of Tennessee. Instead, a new foreign LLC must be formed first, and then the domestic LLC must be merged into it.
Can you retain the FEIN? Yes, the original LLC’s FEIN would apply to the coverted entity n/a No, the FEIN of the surviving corporation of the merger would be used No, the FEIN of the surviving corporation of the merger would be used
Florida Corporation n/a Florida allows all for-profit entities to convert to domestic LLC Florida allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it. Florida allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it
Can you retain the FEIN? n/a Yes, the original corporation’s FEIN would apply to the coverted entity Yes, the original corporation’s FEIN would apply to the coverted entity Yes, the original corporation’s FEIN would apply to the coverted entity
Florida LLC Florida allows all for-profit entities to convert to domestic corporations n/a Florida allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it Florida allows all for-profit entities to convert to foreign corporations, so long as the resulting jurisdiction also allows it
Can you retain the FEIN? Yes, the original LLC’s FEIN would apply to the coverted entity n/a Yes, the original LLC’s FEIN would apply to the coverted entity Yes, the original LLC’s FEIN would apply to the coverted entity