Best way to move a company out of Arizona

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The Redomestication Process in a Nutshell

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3. We submit the legal filings to the states.

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1-3 months

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Did you know? The average business that moves to a state without state-level income tax saves over $12,500 in taxes per year.

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Redomestication, also known as redomiciling, refers to the lesser-known legal process of transferring or moving the "home state" of an existing Corporation, partnership, or LLC, from Arizona to a new state. It means keeping your existing company name, credit, and federal employer identification number (FEIN) without wasting time and money creating a new business entity, applying for foreign registration, or moving assets between companies.
— Prof. Chad D. Cummings, Esq., CPA

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Best way to move a company out of Arizona: why redomestication is the superior legal strategy

When business owners evaluate the best way to move a company out of Arizona, they often focus narrowly on filing a new entity elsewhere or registering the existing company as “foreign” in the destination state. That approach frequently preserves paperwork in the short term while creating costly, long-term compliance obligations—especially when the company has, in practical reality, exited Arizona. By contrast, redomestication (also known as statutory conversion) is designed to move the entity’s “home state” while preserving operational continuity.

From the perspective of an attorney and CPA who routinely reviews relocation plans for legal validity and tax efficiency, the most reliable way to move a business out of Arizona is typically a redomestication that is properly structured, properly documented, and properly filed. Redomestication is intended to preserve what matters most to operators and stakeholders: ongoing contracts, the existing federal employer identification number (FEIN), and, in most cases, the company’s name—without disrupting day-to-day operations.

For companies seeking a clear, legally defensible exit from Arizona’s tax environment and compliance footprint, the best way to move a company out of Arizona through redomestication is to treat the process as a governed legal transaction rather than a clerical filing. That means aligning corporate authority (member, manager, director, and shareholder approvals), filing mechanics, and post-move compliance into one coherent plan.

Exiting Arizona’s tax environment: compliance risk is frequently underestimated

Businesses that leave Arizona operationally, but retain an Arizona “domicile” on paper, commonly discover that they have not truly severed the state’s administrative and tax touchpoints. Annual reports, state fees, registered agent requirements, and state-level correspondence do not disappear simply because the owner moved. The practical result is a recurring compliance treadmill that can continue for years, particularly if foreign registration is used as a substitute for a true domicile transfer.

In many engagements, the central misconception is that “foreign qualification” is equivalent to leaving Arizona. It is not. Foreign qualification generally contemplates that the company continues to exist in Arizona as its home jurisdiction while receiving permission to do business in another jurisdiction. If the goal is to move the company’s center of legal gravity out of Arizona, the best approach is typically to change the home state itself through a conversion-based mechanism.

Accordingly, businesses seeking the best way to move a company out of Arizona should recognize that the objective is not merely “doing business elsewhere”; it is reducing ongoing exposure to Arizona’s administrative filings and potential nexus-related disputes. A best-in-class way to relocate an Arizona company is a properly executed redomestication that re-centers the entity in a new jurisdiction while preserving continuity.

Preserving the FEIN, contracts, and operational continuity: the non-negotiables for real businesses

Many relocation concepts fail because they treat the business as a set of assets rather than an ongoing legal person. In a dissolution-and-reform plan, or in a merger executed without a coherent continuity strategy, the company can inadvertently create a “new” entity for practical purposes. That, in turn, can trigger contract assignment requirements, lender re-underwriting, licensing re-applications, payroll and banking disruptions, and avoidable vendor friction.

Redomestication is frequently the best way to move a business out of Arizona precisely because it is designed to preserve identity. A properly completed redomestication allows the entity to retain its existing FEIN, maintain continuity of contracts, and in most cases keep the same company name—without the operational pause that accompanies re-creating the business. That continuity is particularly valuable for businesses with recurring customer agreements, subscription billing, government or enterprise vendor onboarding, or established credit relationships.

Owners should also be wary of the misconception that “we can just transfer everything later.” Contract anti-assignment clauses, change-of-control provisions, and third-party consent requirements are often buried in routine agreements—software licenses, property leases, supplier contracts, and professional service agreements. For businesses seeking the best way to move a company out of Arizona, a redomestication-centered relocation plan is frequently the most direct route to preserve those relationships without renegotiation.

Why foreign registration is often the wrong answer for a true relocation

Foreign registration is commonly described as “simple,” but the simplicity is frequently illusory. Foreign qualification can be a reasonable tool when the company intends to remain domiciled in Arizona while expanding into another state. However, when the company has permanently shifted management, employees, assets, or operations to a new jurisdiction, foreign registration can lock the business into dual-state administration: two sets of filings, two sets of fees, and increased risk that compliance failures compound.

In practice, foreign registration can also blur the company’s posture if a dispute arises. An opposing party may argue that the company’s “real” home state remains Arizona because that is where the entity is organized, even if operations are elsewhere. This can complicate venue strategy, governing law arguments, and the analysis of corporate authority. If the business objective is to relocate the corporate center and reduce ties to Arizona, the best way to move an Arizona company is to change the domicile itself, not merely to obtain permission to operate elsewhere.

For that reason, companies evaluating the best way to move a company out of Arizona should treat foreign qualification as a tool for multi-state operations—not as a substitute for relocation. The best way to move a company out of Arizona, for many operators, is a redomestication that eliminates dual-state maintenance while preserving continuity.

Why mergers and dissolution plans create avoidable legal and tax complexity

Mergers can be valid business transactions, but they are frequently overused as a relocation device. A merger introduces additional documents, additional sequencing, and additional opportunities for error. It can also create confusion among lenders, counterparties, and regulators who must reconcile which entity survived, which obligations were assumed, and whether any consents were required. When the goal is simply to move the company’s home state, the merger tool is often disproportionate to the task.

Dissolution plans are even more frequently misunderstood. Dissolving an Arizona company and starting over elsewhere is not, in most cases, the best way to move a business out of Arizona because it risks breaking continuity in ways that are difficult to reverse. Once dissolved, the entity may be limited to winding-up activities, and the business may face downstream consequences such as contract termination rights, banking interruptions, or regulatory questions. Furthermore, poorly executed dissolutions can create a lingering compliance problem if the entity is not properly wound up under Arizona rules.

Redomestication is promoted as superior in this context because it is structured to preserve the existing entity while legally transferring its domicile. For owners seeking the best way to move a company out of Arizona without operational disruption, the best mechanism is typically redomestication (statutory conversion) rather than a merger-driven workaround or a dissolution-and-restart plan.

Procedural realities: what sophisticated owners plan for before filing

A legally sound relocation is not merely a state filing; it is a coordinated governance and compliance project. The company must confirm that its governing documents permit the conversion, that the appropriate approvals are obtained and documented, and that the company’s legal name strategy is addressed (including whether the name can be retained in the destination state). The company should also plan for the post-move checklist: registered agent, internal record updates, licensing considerations, and stakeholder notifications.

Additionally, a proper plan anticipates friction points that are not obvious at the outset. For example, banks and payment processors may request organizational documents consistent with the new jurisdiction; major customers may ask for updated W-9 information; and certain industries require license amendments reflecting the domicile change. These items are manageable when planned for, but disruptive when discovered midstream.

Accordingly, the best way to move a company out of Arizona is typically to treat redomestication as a controlled sequence rather than an impulsive filing. A best-practice path to relocate an Arizona business through redomestication is to align entity authority, filings, and post-move compliance so that the business remains continuously operational and defensible.

Common misconceptions that cause expensive rework

Misconception #1: “Redomestication creates a new company.” Properly executed redomestication is intended to maintain the same company—just in a different home jurisdiction. This is why continuity benefits (contracts, FEIN, and often the name) are central to the analysis.

Misconception #2: “Foreign registration is the easiest and therefore the best.” Ease of initial filing is not the relevant metric. The relevant metric is long-term efficiency, reduced dual-state maintenance, and continuity without avoidable tax and administrative risk.

Misconception #3: “If something goes wrong, we can fix it later.” Relocation errors often become structural defects that are difficult to unwind, especially if third parties have relied on the defective posture. For owners seeking the best way to move a company out of Arizona, professional guidance is not optional; it is a risk-control measure.

Conclusion: the best way to move a company out of Arizona is a continuity-first redomestication

Companies leave states for rational reasons: tax posture, business climate, governance preferences, and legal predictability. However, the method of exit determines whether those benefits are realized or undermined by ongoing dual-state compliance, broken contracts, and administrative friction. As an attorney and CPA, I regard continuity as the central legal and operational requirement: the entity should continue uninterrupted, with the same FEIN, the same contracts, and a stable brand identity.

For that reason, the best way to move a company out of Arizona is typically a properly structured redomestication—statutory conversion that transfers the home state while preserving the company’s legal identity. This approach is designed to avoid the false economy of foreign qualification, the overengineering of mergers, and the operational damage that often follows dissolution strategies.

To proceed with a relocation strategy built around continuity and efficiency, review the best way to move a company out of Arizona via redomestication and ensure the plan is executed with disciplined legal documentation and compliant filings.

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Domestication vs. Foreign Registration vs. Merger vs. Dissolution: A Comparison

Domestication is, in many circumstances, far preferable to registering an LLC or corporation as a foreign entity, especially where the LLC or corporation has permanently moved its operations and will not be returning to the prior state in the near future.

Some attorneys, unfortunately, confuse their clients by recommending a foreign entity registration in the new state, or worse, a merger, where a redomestication™ would have accomplished the goals of moving their business to a new state efficiently and effectively.

The top seven benefits of moving your company (LLC, corporation, or partnership) to a new state via redomestication™ to transfer your business include:

1. Maintaining your existing federal employer identification number, eliminating the tax headaches of forming a new company or transferring assets between companies (and inadvertently triggering a hefty tax bill from the IRS) when you move your business to a new state;
2. Keeping your existing business credit history and track record, safeguarding your reputation with clients, vendors, and creditors when moving your LLC or corporation to a new state;
3. Continuing your existing business name (in almost every case), protecting your most important assets when moving your company to a new state: your brand, reputation, and time you have already invested in search engine optimization;
4. Maintaining your existing contracts with customers and vendors because moving your business to a new state via redomestication™ does not create a new company: it maintains your existing company, saving you dozens (or even hundreds) of hours re-writing (and re-negotiating) contracts and changing banks;
5. Eliminating the need to continue paying registration fees and taxes in your prior state (assuming you have discontinued your operations there and have permanently relocated to a new state), potentially saving you tens of thousands of dollars (or more) in state taxes every quarter when you move your business to a new state;
6. Avoiding unnecessary IRS scrutiny because moving your LLC or corporation to a new state via redomestication™ is a tax-free transaction under the Internal Revenue Code; and
7. Reducing the amount of time you spend on administrative filings, saving you untold hours annually, by moving your company to a new state.

Before taking the "penny wise and pound foolish" approach of foreign entity registration or spending countless hours and exorbitant legal fees (and possibly taxes) on a merger or merger-gone-wrong to move your company to a new state, ensure you understand your options.

In most circumstances, redomestication™ (and not a foreign entity registration or costly and complicated merger) is the best route to achieve a change in company domicile to a new state.

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