Best way to move a company out of California

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The Redomestication Process in a Nutshell

1. Enter your biz name HERE.

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24-48 hours

2. We prepare the legal docs.

Our dually-licensed attorney+CPA prepares the legal documents and sends them to you via DocuSign.

You sign. We take it from there.

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3. We submit the legal filings to the states.

We monitor the status closely, respond to inquiries from their offices, and send you weekly updates.

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1-3 months

4. Approved! ✅

We send you a checklist of go-forward obligations and simple steps for your tax pro to follow.

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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 California 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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The best way to move a company out of California is to change its legal home state without interrupting operations

When clients ask me, as an attorney and CPA, what is truly the best way to move a company out of California, they are rarely asking about geography. They are asking how to leave behind California’s tax environment, compliance drag, and legal exposure without sacrificing continuity, contracts, banking relationships, or the company’s established identity. The most effective strategy is the one that treats the relocation as a legal change of domicile, not a restart of the enterprise.

For most established entities that are permanently relocating their center of operations, redomestication (statutory conversion) is the most direct, least disruptive mechanism to move a corporation, LLC, or partnership out of California while preserving the company’s existing architecture. The process is designed to keep the business intact—rather than forcing owners into piecemeal workarounds that create lingering obligations in California.

To evaluate whether a redomestication is the best mechanism for your facts, review the firm’s process and requirements at the best way to move a company out of California through redomestication. That resource explains, in practical terms, how a company can relocate to a new state while maintaining operational continuity.

Why exiting California’s tax environment is a rational business objective

California’s tax environment can impose meaningful costs on profitable companies and, in many cases, on companies that are not profitable but remain registered or treated as doing business in the state. Owners often underestimate how long California’s tax and filing obligations can follow them after a “move,” particularly when they choose an approach that leaves the entity tethered to California through ongoing registration, payroll, sales, or contractual activity.

The best way to move a company out of California is therefore not merely to open an office elsewhere or change a mailing address; it is to implement a defensible, document-driven shift of the entity’s home state. When the company’s domicile changes properly, the business can simplify compliance, reduce administrative friction, and position itself for a more predictable go-forward tax posture—subject, of course, to ongoing nexus considerations based on where the company actually operates.

A common misconception is that “forming a new LLC in another state” automatically ends California exposure. In practice, that often creates two entities, two sets of filings, and a trail of assignments, amendments, bank updates, and contract renegotiations. By contrast, a properly executed redomestication is frequently the most straightforward path for owners who want the best way to move a company out of California while keeping the enterprise cohesive.

Why redomestication is superior to foreign registration for companies leaving California

Foreign registration is often presented as the quick fix: keep the California entity and “register” it to do business in the new state. For a company that has truly relocated and does not intend to maintain California operations, that approach commonly produces the worst of both worlds. The company may still be required to maintain California compliance, pay California fees, and file California returns, while also taking on the obligations of the new state.

Redomestication, by contrast, is structured to change the company’s domicile—meaning the new state becomes the legal home state of the same existing entity. For owners seeking the best way to move a company out of California, the operational implications are significant: there is typically no need to maintain dual-state entity status simply because the company wants to conduct business where it has relocated.

For a detailed explanation of why statutory conversion is frequently the best way to move a company out of California without creating dual compliance burdens, see best way to relocate an existing business entity out of California via redomestication. The key advantage is continuity with fewer moving parts.

Contract continuity: the hidden issue that makes redomestication the best mechanism in many cases

In established companies, contracts are not incidental paperwork; they are operational infrastructure. Vendor agreements, customer MSAs, leases, financing documents, software licenses, and payment processor terms frequently contain assignment restrictions or notice requirements. When owners attempt to “move” by forming a new entity or conducting a merger without careful structuring, they can inadvertently trigger consent requirements, defaults, or renegotiations.

The best way to move a company out of California is to avoid unnecessarily changing the contracting party. Redomestication is designed to preserve the same legal entity—meaning the company generally continues as the same contracting party, with the same history, and the same relationships. That continuity can prevent downtime, preserve revenue streams, and reduce legal risk associated with hurried assignments or incomplete contract amendments.

A related misconception is that “contracts can always be assigned later.” In my experience, later becomes never—until an audit, financing event, acquisition, or dispute forces the issue. A redomestication-first approach is often the best way to move a company out of California while keeping contractual exposure controlled and deliberate.

Preserving the FEIN and business identity: continuity that owners undervalue until it is gone

Many owners do not appreciate how integral a company’s federal employer identification number (FEIN) is to the operational stack. Payroll systems, retirement plans, insurance policies, banking relationships, merchant processing, and tax filings are built around that identifier. Replacing it can be expensive, time-consuming, and disruptive, particularly for employers with multi-state payroll, benefits, or regulatory reporting obligations.

For that reason, the best way to move a company out of California is typically the method that allows the business to keep its FEIN and preserve its identity. Redomestication is specifically valued because it generally enables the company to retain its FEIN and, in most cases, its name—avoiding the ripple effects that come from creating a brand-new entity and migrating everything over.

Owners also routinely overlook reputational continuity. Business credit history, vendor terms, and platform trust scores are not easily replicated. If your objective is the best way to move a company out of California while preserving the credibility you have already earned, redomestication is usually the most business-minded solution.

Operational disruptions: why “simple” alternatives often become expensive projects

From a legal and accounting perspective, “simple” alternatives commonly conceal complex implementation steps. Forming a new entity and “moving the business over” can require asset transfer documents, IP assignments, contract assignments, updated invoices and W-9s, new bank resolutions, new payroll registrations, new sales tax registrations, and the rewriting of internal governance documents. Each step introduces opportunities for errors that later become costly to fix.

A merger can be appropriate in limited contexts, but it can also introduce unnecessary legal complexity, higher professional fees, and longer timelines—particularly if the company’s records are not pristine or if stakeholders disagree about structure and consideration. Dissolution is even more frequently misunderstood; owners sometimes dissolve a California entity believing it is required to “leave,” only to discover that dissolution can create tax issues, operational discontinuities, and administrative chaos.

When the goal is the best way to move a company out of California with minimal disruption, the controlling question should be: which mechanism keeps the company intact while changing the domicile? In many circumstances, redomestication answers that question more cleanly than foreign registration, merger, or dissolution.

Procedural discipline: what must be handled correctly when moving a company out of California

Relocating an entity’s home state is not a do-it-yourself exercise for a serious operating company. The filings must be accurate, the entity’s authority must be properly documented, and the sequence of actions must be coordinated so that the company does not lapse, lose good standing, or create avoidable compliance exposure during the transition. In addition, internal governance requirements—such as member approvals, shareholder approvals, or board consents—must be properly satisfied and recorded.

Equally important, owners should ensure that state filings align with operational reality. The best way to move a company out of California is not a paper move; it is a coordinated legal change that matches where management, employees, and business functions actually occur. Overlooking this alignment is one of the most common reasons relocations create lingering questions later, especially during financing, audits, or sales.

For owners seeking an efficient, professionally managed path, the firm’s redomestication service is designed specifically for businesses that want the best way to move a company out of California while preserving contracts, FEIN continuity, and business identity. Begin the process at best way to move a company out of California using redomestication (statutory conversion).

Conclusion: the best way to move a company out of California prioritizes continuity, compliance, and leverage

Companies relocate for many reasons: tax efficiency, regulatory predictability, litigation risk management, operational flexibility, and long-term planning. Regardless of the motivation, the most defensible relocation is the one that preserves the core enterprise while changing the legal home state in an orderly, documented manner. That is precisely why redomestication is so often the best way to move a company out of California.

Owners should not confuse movement of people and assets with movement of the entity itself. The best way to relocate a company out of California is frequently the strategy that avoids creating a second company, avoids unnecessary mergers, and avoids dissolution mistakes that can be difficult to reverse. A properly structured redomestication is designed to keep the business operating as the same entity—while repositioning it in a new state.

To proceed with a streamlined conversion process and preserve what matters most—your contracts, your FEIN, and your business identity—use the best way to move a company out of California by filing a redomestication.

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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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