Moving your business to a new state may not be as complicated as you think. But you will need to do your homework to ensure a smooth--and legal--move.
Owners move their companies out of state for a variety of reasons. The change might be prompted by personal or health reasons, to get to a more favorable business climate, to operate in a state that has no state income tax, or because of some other motivation.
But whatever your reason for making a move, the first thing to do is to consult with your attorney, who can help you navigate the legal and regulatory waters of moving your business. There are important questions to be answered. The Small Business Administration (SBA) says the questions asked most frequently by business owners involve the impact that moving may have on taxes, registration, and incorporation.
So let's consider the answers as they pertain to different types of businesses:
Sole proprietorships and partnerships
These businesses are the easiest to move. The first step is to register your business in the state to which you are moving, using the "Doing Business As" (DBA) registration process. Then you need to discontinue your old business. Depending on the legal requirements of your new state, you might register at the county clerk's office or with the state government.
Limited liability companies (LLCs)
Moving an LLC to a new state involves several options:
Corporations (C or S)
Moving a corporation to a new state is much like the process for moving a LLC. Your options are:
Although an online business has no boundaries regarding where its owner can do business, if you move an online business to a new state you must comply with applicable laws in that state. To take an online business operation to a new state, you must move your business entity, following one of the methods for moving sole proprietorships, partnerships, LLCs, or corporations. If you have an e-commerce website, you also will need to apply for a sales tax permit in the new state.
Once you've moved your business, you'll need to finish the job by applying for necessary licenses and permits (which vary by state), making sure you comply with the local zoning laws in your new location as well as dealing with the tax ramifications, meeting reporting requirements, and adhering to the requirements of your old state for dissolving a corporation. Your attorney can help you make sure you don't miss anything.
Finally, don't forget that you can deduct or capitalize your costs in moving your business. That's the case regardless of whether you operate your company from home or a business location.
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