Jump to Main Content
USA flagAn Official Website of the United States Government
Managing a Business

Blogs.Managing a Business

Register

How to Move Your Sole Proprietorship, LLC or Corporation to a New State

Comment Count:
8

Comments welcome on this page. See Rules of Conduct.

How to Move Your Sole Proprietorship, LLC or Corporation to a New State

By kmurray, Contributor and Moderator
Published: October 31, 2013

Are you moving to a new state and wondering how to re-establish your business there? Wondering how to make a seamless transition for your sole proprietorship, LLC or corporation in a new location? Here’s some essential information about relocating your business.

Sole Proprietorships

It’s pretty straightforward to move a sole proprietorship (or partnership) to a new state. You’re required to register your new business using the “Doing Business As” (DBA) registration process in your new state at which point you’ll discontinue your old one. Depending on the location of your business, you’ll either register at your county clerk’s office or with the state government. You can read more about DBA names here.

Limited Liability Companies (LLCs)

There are a few choices to consider when you move your LLC to a new state, so it’s wise to consult an attorney for expert guidance on the particulars of your business situation. Here are your options:

  1. Continue your LLC in the previous state. Register as a foreign (out-of-state) LLC in your new state. This translates into more paperwork for you because you’ll need to file duplicate annual reports and it may complicate your taxes. Things get more complex if you’re reporting for a multi-member LLC.
  2. Dissolve your LLC in the previous state. Establish a new LLC in your new state. There aren’t any tax consequences if you take this route.
  3. Register a new LLC in your new state. Each member transfers membership interest. When you register a new LLC, have each member transfer his or her percent ownership from the previous LLC to the new one.
  4. Register a new LLC in your new state. Merge your previous LLC into your new LLC. You can continue with your existing EIN because the IRS views this as a continuation of the previous LLC. If all LLC members still have a 50-percent interest in the capital and profits of the new LLC, you won’t face any tax consequences.

Corporations

Moving a corporation to a new state mirrors the process for an LLC. As always, it’s best to talk to an attorney about any tax consequences, reporting requirements and any specific requirements in your previous state about dissolving a corporation. Here’s what you can consider when relocating your corporation:

  1. Continue your corporation in the previous state. Register as a foreign corporation in your new state. Again, this translates into increased paperwork and the chance that you’ll incur fees in both states.
  2. Dissolve your corporation in the previous state. Establish a new corporation in your new state. Be aware that there may be costly tax consequences associated with this option and may have implications on employee benefits (such as retirement plans).
  3. Register a new corporation in your new state. Merge your previous corporation into your new one. This eliminates the need to pay fees in two states and allows for a tax-free reorganization.

After Your Move – Licenses, Permits and Taxes

Don’t forget your post-move steps for your small business, including applying for all the necessary licenses and permits (which vary by state). And keep in mind local zoning laws as they apply to your new location.

You’ll also want to be sure to take care of your tax obligations. Because you’re moving out of state, you’ll need to close out your tax year in your old state (often as simple as checking the “Final Return” box on your state return). Every business is unique, so talk to a tax expert for an understanding of your business tax responsibilities in the first year of your move. You can also deduct or capitalize the costs incurred during business relocation (including moving costs, relocation site scouting trips, travel and meeting costs). Get more guidance on small business expenses and tax deductions here.

Related Articles

About the Author:

Katie Murray

Contributor and Moderator

I am an author and moderator for the the SBA.gov Community. I'll share useful information for your entrepreneurial endeavors and help point you in the right direction to find other resources for your small business needs. Thanks for joining our online community here at SBA.gov!

Comments:

We are in process of moving a partership from California to Colorado. However, we are unsure if there are any other benefits or advantages (other than limited liability) to convert it to an LLC since the partnership will be purchasing some real estate? We just don't like the fees to maintain an LLC.
Limited Liability is the biggest advantage, tax can remain the same depending on state statute. As for not liking the fees associated with an LLC, you could face larger costs than a $50 filing fee and a few hundred dollars in attorney fees if things don't go as planned.
This is great information. I just moved from Michigan to Tennessee due to economical issues. I was concerned about moving my LLC.
Hi there, Rich! I'm so glad this article was helpful to you, we appreciate the positive feedback!  Best of luck to you with your LLC in Tennessee!
If you want to move a sole proprietorship (or partnership) to a new state,you should apply for all the necessary licenses and permits,abide by local laws and restrictions and take care of your tax obligations.Consulting an attorney is a good choice.
Consult an attorney before you do it.They will give you a good advice based on the actual situation.
It’s pretty straightforward to move a sole proprietorship (or partnership) to a brand new state. seek advice from an lawyer for professional guidance on the particulars of one's business circumstance. Moving a corporation to a brand new state mirrors the method for an LLC. move methods for the tiny business,take care of your tax obligations.deduct or capitalize the charges incurred during company relocation .The information is very good and now I think I am in a position to take a decision.thanks
Hello; thanks for this post. I often hear from owners of party rental companies, food concessionaires, or caterers who are wanting to sell their business because they or their spouse are being relocated for one reason or another and they don't want to or just don't know how to move their business with them. Now, I can refer them to this post. Thanks so much, max

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!