Changing Your LLC's State: Three Mechanisms Compared

Domestication, also called conversion. The same legal entity changes its state of formation. Both states have to permit it, and not all pairs do. The entity's history continues.

Foreign qualification. The company stays formed where it is and registers to do business in a second state. Now you have two states, two sets of fees and two sets of filings. Nothing moved; something was added.

Starting over. Form a new LLC in the new state and wind up the old one. Two entities exist briefly, then one.

This is the part that decides it.

The "new EIN" row is what people underestimate. A new EIN means a new bank application, which means a new country-of-residence check, which for a founder in a corridor where the banks are closed can mean not getting one at all. If your banking works today, starting over risks it.

You want lower state costs. Domestication if both states allow it. The difference between Delaware's annual tax and Wyoming's is a few hundred dollars a year, so the move pays back over several years rather than immediately.

You now have a physical presence in a state. Foreign qualification, and it is generally not optional. This is the case that is not a choice.

Your entity is dissolved or in bad standing and you want a clean start. Starting over may genuinely be simpler than reinstating, weighed against losing the EIN and everything attached.

You want to leave California. Read carefully: California's tax attaches to doing business there, not to where you formed. Moving the formation state does not remove the obligation if the nexus remains.

Every LLC doing business in California or organized in California owes an $800 annual tax, and it keeps falling due even in a year with no trading, until the LLC is cancelled.[1]California Franchise Tax Board, Limited liability company

You are raising US venture capital. They will usually want a Delaware C corporation, which is a conversion of entity type as well as state and is a different project from any of the three above.

If the company has no revenue history worth keeping, no contracts to reassign, a bank account you have not opened yet, and no processor integrations, then forming fresh in the right state is often cheaper and faster than domestication, which involves filings in two states.

The calculation changes completely once a bank account exists. At that point the EIN is load-bearing.

Delaware's figure is statutory:

Every domestic and foreign Delaware LLC owes a flat $400 annual tax, due on or before June 1, and files no annual report.[2]State of Delaware, Delaware Code, 6 Del. C. § 18-1107(b)

This is a terminology error that runs through almost everything written on the subject, and it will send you to the wrong form.

In Delaware and Florida, domestication means a non-US entity becoming a domestic one. It does not cover moving an LLC from another US state. Delaware's statute defines the term by exclusion:

"non-United States entity" means a foreign limited liability company (other than 1 formed under the laws of a state) or a corporation, a statutory trust... formed, incorporated, created or that otherwise came into being under the laws of any foreign country or other foreign jurisdiction (other than any state).

Florida's is a single sentence and just as clear:

By complying with this section and ss. 605.1052-605.1056, a non-United States entity may become a domestic limited liability company if the domestication is authorized under the organic law of the non-United States entity's jurisdiction of formation.

Florida's own form is titled "Articles of Domestication of a Non-U.S. Entity."

The word for a state-to-state move in both of them is conversion. Ask a Delaware or Florida filing office to domesticate your Wyoming LLC and you are asking for a procedure that does not apply to you.

Wyoming is the exception, and its statute says so in terms. W.S. 17-29-1012 opens with exactly the words Delaware's excludes:

Any limited liability company created under the laws of any of the several states of the United States... may become a domestic limited liability company of this state by delivering or causing to be delivered to the secretary of state articles of domestication.

"Any of the several states of the United States." In Wyoming, domestication is the state-to-state route, and it is the word on the form.

Wyoming also runs a second inbound route, Continuance under W.S. 17-29-1010, which speaks of "any foreign jurisdiction." Whether that phrase reaches other US states or only other countries is not defined anywhere in the chapter, and the Secretary of State lists both forms under the same heading without saying when each applies. We could not resolve it. If you are moving in from another US state, domestication under 17-29-1012 is the route the statute plainly gives you.

One inbound requirement with a short fuse: the articles must include "a certificate of good standing not more than thirty (30) days old." Order it last, not first.

Wyoming's exit has a toll and a tail.

Wyoming charges a special toll charge of sixty dollars, on top of all other taxes and fees, for a certificate of transfer moving an LLC out of the state.[3]Wyoming Statutes, W.S. 17-29-1011(e)

And the Secretary of State "shall require that the limited liability company maintain within the state an agent for service of process for at least one (1) year after the transfer is effected." You leave Wyoming and keep paying a Wyoming agent for a year.

Texas calls it conversion, and its definition anticipates that the other state will call it something else:

"Conversion" means... the continuance of a domestic entity of one type as a foreign entity of the same type that may be treated as a domestication, continuance, or transfer transaction under the laws of the jurisdiction of formation of the foreign entity

Texas has written the translation into its own definition. Its conversion is your destination's domestication, and the word "domestication" appears nowhere else in the relevant chapters.

One Texas option that is not available for a US-state move: section 10.1025, "conversion and continuance," which lets an entity keep existing in both places at once. It applies only where the counterpart is a non-United States entity. Move between US states and the old existence ends.

We searched all of NMSA 1978 Chapter 53. There is no domestication provision, no continuance provision and no transfer-of-domicile provision anywhere in it. The only hit for "domestication" in the entire chapter is a citation to an American Law Reports article in an annotation.

What New Mexico does have is a conversion statute with a closed list. Section 53-19-60 says "A corporation, partnership or limited partnership may be converted to a limited liability company." A foreign LLC is not on that list, and New Mexico's own definitions put it outside: a foreign LLC is defined as "an unincorporated association," which means it is not a "foreign corporation" either.

The New Mexico Attorney General has read the same closed list the same way, in an advisory letter printed with the statute: the LLC Act "contains specific references to conversions from one business entity type to another... but no provision of the LLC Act provides for other types of entity transformations."

So a Wyoming LLC cannot convert into a New Mexico LLC, and a New Mexico LLC cannot convert into a Wyoming one. The route New Mexico does authorize is a merger: section 53-19-62 permits an LLC to merge "with or into one or more limited liability companies, foreign limited liability companies," and so on. That is a different transaction with different paperwork on both sides, and it is the only one we could verify.

A caveat we are keeping honest: section 53-19-62.3 says these provisions "do not preclude an entity from being converted or merged under other law." We searched Chapter 53 and not the whole New Mexico code, so we cannot rule out a provision elsewhere. We can say there is none in the chapter that governs LLCs.

Two operational notes that change the plan rather than the price.

Wyoming will not expedite and will not take it online. Its own form gives a processing time of up to three weeks from receipt, and says plainly that "Wyoming statutes do not allow for expedited filing at this time." Three weeks with the post, and no way to buy speed.

Texas warns that both jurisdictions have to permit it, which is the failure mode nobody prices:

Not all jurisdictions permit conversions. For a cross-jurisdiction conversion to be effective, the law of both jurisdictions must permit the transaction and be followed.

Check the exit before you pay for the entrance. Texas also requires a franchise tax certificate of account status from the Comptroller, a separate agency on its own timeline.

Which state pairs permit domestication, and the filing fees and timelines for it, were not retrieved. Availability varies and the specific pair matters, so confirm with both Secretaries of State before planning around it.

Whether a domesticated entity keeps its EIN in every case is a question for the IRS and we have not verified it. The table says "generally" for that reason.

Can I move my LLC from Delaware to Wyoming? Possibly, through domestication, if both states permit it for your situation. We have not verified the availability or the fees.

Will I keep my EIN? Generally yes with domestication, no if you form a new entity. That distinction matters more than the filing fee, because a new EIN restarts your banking.

Does moving states get me out of California's annual tax? Only if it removes the nexus. The tax attaches to doing business there, not to formation.

Is foreign qualification the same as moving? No. It adds a state rather than changing one, so you file in both.

What happens to my Stripe account? Domestication means updating details. A new entity means a new application, and for some founders that is the risky part.