When you are making a move to a new state, there are several different options that you have. Even if you are moving a business that is done completely online, you still have to consider the laws that are in place requiring you move the S Corp to your new state. The way that you move your S Corp is going to depend on the laws and requirements in your current state as well as the laws in the new state you are moving into. Mark Dicus & Company is here to talk about what your options are when moving your S Corp into a new state.
Do I Need to Change My Corporation State when Moving?
There are basically four different options for moving an S Corporation to a new state when you make a big move. Following are what your options look like.
– The first and most likely the best option is to move to your new state and set up an entirely new S Corp and merge it together with the existing one. It is important to make this merger to avoid tax penalties and fees that Corporations will get when they are operating in two different states. When you do it this way, you can keep your same Federal Employer Identification Number (FEIN), as well as any credit your business has built up. You will have some upfront costs as you complete all the paperwork that is involved in opening, merging and then closing a business.
– Maybe you don’t want to close your business in the state that you used to live in. If this is the case, you can keep operating in your old state by registering as a “foreign entity” in your new state. The downside to doing this is that you will have to pay fees in both the state that you currently live in and the state that you used to live in, yearly. You should know that some states won’t allow this to be an option which makes finding out it that is an option is important.
– You can also close the S Corp in the old state and open and entirely new one in your new state. This is known as dissolution and formation. You may have more paperwork that you have to take care of and completely take care of any debts or liabilities in the old state.
– If both of the states that you are working with allow a complete conversion or domestication, you have hit the lottery. This allows you to open and/or close businesses and allows you to file paperwork basically saying that you have simply moved your business.
Bookkeepers, Accountants & More in Summerlin, North LV, Henderson, Lone Mountain Village & Greater Las Vegas, Nevada
If you are moving to a new state and aren’t sure how to handle moving your S Corporation, you can rely on Mark Dicus & Company to help you with all the details. Call us today!