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Texas is one of the most business-friendly states and offers a number of cities where the cost of living is lower than in other parts of the country. As such, small and mid-sized businesses have been flocking to the state. With these benefits and no state income tax, many are realizing that the move can be well worth it. If you are one of those looking to move yourself and your LLC to Texas, there are a few ways you can accomplish this. Let’s look at some of your options on how you can move your LLC to Texas.
How to Move Your LLC to Texas
While there are various ways to move an out of state LLC to Texas, your best options will largely be dictated by your own situation. Registering as a foreign entity, for instance, may be an option, but is often the best option for those only looking to temporarily move their LLC or those looking to expand their LLC. In order to register your LLC as a foreign corporation under the 2005 Texas Code Business Corporation Act, you will need to file the necessary documentation with the Texas Secretary of State. Registering as a foreign entity will allow you to continuing conducting business in Texas while your LLC remains in its current state of incorporation. To continue operating as a foreign entity in Texas, you will need to find an annual report, a “Public Information Report,” in both your LLC’s home state and in Texas as well.
Alternatively, you could covert your out of state LLC to a Texas LLC through a process referred to as “domestication.” In order to domesticate your LLC in Texas, you will need to adopt a “plan of conversion” that complies with the Texas Business Organization Code. You will also need to file a number of documents with the Texas Secretary of State. Conversion, or domestication, has the benefit of allowing your LLC to continue business uninterrupted. Property of the LLC will be automatically converted, but outstanding obligations and liabilities of your LLC that are outside of Texas will not go away. As to cost of conversion, you will need to consider the registration and conversion fees you will need to pay. There may also be permits and licenses you need to pay for.
You can also consider dissolving your LLC and forming a new entity in Texas. Your home state may not permit domestication. If this is the case, conversion to a Texas LLC may not be a viable option and dissolving your LLC and forming it again as a new entity in Texas may be the best way to go. To establish your new Texas LLC, you will need to apply for a new tax ID so that you can transact in the state. There is also extensive documentation you will need to file with the Texas Secretary of State. If conversion is not an option for you, then this is a good way to go. Be aware, however, that with your fresh start may come paying the same start-up costs you already paid before all over again.
Business Law Attorney
Looking to move your LLC to Texas? Talk to the knowledgeable team at the Kumar Law Firm about how they can help make this happen. Contact us today.