So, you’ve moved to Arizona in search of warmer weather and endless sunshine. Perhaps you should
move your business to Arizona, too! Whether for more convenience or to seek more favorable tax
treatment, moving your business to Arizona could be advantageous in a number of different ways.
There are a few different ways to go about achieving this objective: domestication, foreign
registration, and merger to name a few popular ones. In this blog post, we will discuss the
domestication process, what it is, why it may be an advantage, and how we can help you through the
process.
What is Domestication?
In the simplest terms, domestication merely refers to the process of moving an LLC or corporation
from one state to another. In legal terms, this process allows you to change the jurisdiction of the
entity from the current state to the new one. This has the effect of allowing the new state’s (e.g.,
Arizona) laws to govern the business. Domestication is only a viable option if the state from which
you are moving the business allows domestication. For example, while New York does not currently
support domestication California does.
Why Would I Domesticate My Business?
There are a number of reasons business owners may consider domestication. First, it may simply be
more convenient to manage and operate your business if everything is conducted out of Arizona
rather than your previous home state. Another big reason is for tax advantages. For example, you
could potentially have significant tax savings if you move your business from a high tax state like
California or New Jersey to Arizona. There may also simply be a more advantageous business and
legal climate in Arizona as compared to your previous state. Finally, domestication is one of the
simplest and stress-free ways to accomplish moving your business to a new state.
What Does the Domestication Process Involve?
In order to domesticate your business, we would draft multiple different documents for you to
effectuate the move. This would include an Agreement and Plan of Domestication which lays out
the basic rules for the domestication from one state to another. We would also file a Statement of
Domestication with the Arizona Corporation Commission to reflect this move. If you’re moving an
LLC, we would file Articles of Organization to create the domesticated Arizona entity (or Articles of
Incorporation for a corporation). You may even consider creating a new Arizona-compliant
operating agreement for your LLC, but this is just a simple outline of the process.
Concluding Thoughts
If it’s available, it is a relatively simple and painless process to
accomplish these objectives. Contact us today to discuss your situation, and we will determine if
domestication could be a good fit for you and your business!
Author: Colton Powell Esq.