How do you move a foreign LLC into New York? Let’s say you formed a limited liability company in another state but are now moving to New York and plan to move the center of your business operations with it? You basically have two options: 1. Get authorized to do business in New York, or 2. merge your foreign LLC into a new New York LLC.
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1. Get Authorized to do Business in New York
New York law requires that you register your foreign LLC in New York if you start doing business here, see Section 802 New York Limited Liability Company Law. You do that by applying for a certificate of authority with the New York Department of State. They are a little cagey about what “doing business in New York” means. They say on their site: “The New York Department of State does not give opinions on what activities constitute doing business in New York State for qualification purposes. You may wish to review an Opinion of Counsel entitled “Doing Business” in New York: An Introduction to Qualification.” That opinion is 22 years old and full of legalese, not sure if the regular audience of this blog would get much information out of it. But rest assured, if you are moving your entire business to New York, and you do all the wheeling and dealing here, you are doing business in New York and you need a certificate of authority.
What are the drawbacks of merely getting a certificate of authority? The laws governing the internal workings of your LLC will still be the ones of the State where you initially formed it. If you have more than one member in your LLC, this may not be a desirable outcome. Let’s say 5 years down the road a dispute arises among the members of the LLC and you sue them in New York. All the members are in New York. The New York courts would still have to apply the foreign laws and obviously, they are not as experienced in applying those laws.
If you want to simply get the certificate of authority to do business in New York, follow all the steps outlined on the website of the Department of State.
2. Merge your foreign LLC into a new New York LLC
Unlike some other US states, New York does not have laws that allow you to “domesticate” your foreign LLC into New York. I’ve seen people recommending dissolving your foreign LLC and form a new LLC in New York. I do not recommend that because you may be faced with unintended tax consequences. Instead, I would recommend forming a new New York LLC and then merging your foreign LLC into this new LLC. This is how it is done:
Form a new LLC, see here how to do that online.
Merge the foreign LLC into the new LLC by adopting an agreement of merger and filing a certificate of merger with the Department of State. As a result, the foreign LLC will cease to exist, but all its rights, assets, and members, would be moved into the new LLC.
Since the adoption of an agreement of merger is a little bit more complicated, I would recommend getting a lawyer, such as myself, to help with this procedure.
