Best way to move a company out of Illinois

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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 Illinois 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 Illinois: why redomestication delivers continuity, not disruption

When owners evaluate the best way to move a company out of Illinois, the discussion is frequently framed as a choice between “forming a new entity” and “registering as a foreign entity.” In my experience as an attorney and CPA, that framing is incomplete and often leads to avoidable costs, compliance burdens, and operational friction. A properly executed redomestication (also called statutory conversion) is designed to move the company’s legal home state while preserving the business itself.

Stated differently, the most defensible way to relocate a business from Illinois is the method that preserves continuity: existing contracts remain in force, the federal employer identification number (FEIN) stays with the entity, and operations proceed without re-papering customers, vendors, banks, payment processors, or insurers. For that reason, redomestication is commonly the best way to move a company out of Illinois when the business has permanently ceased Illinois operations and intends to operate going forward from a new state. To evaluate whether your entity qualifies, review the best way to move a company out of Illinois through redomestication and confirm the legal prerequisites with counsel.

Exiting the Illinois tax environment: preserving the entity while changing the state of domicile

Many businesses seek the best way to move a company out of Illinois because they have outgrown the state’s tax environment or because the company’s owners, workforce, and customers have migrated elsewhere. The problem is that “moving” an entity is not a tax concept; it is a legal concept. Where the entity is domiciled, where it is registered, and where it has tax nexus are separate questions that must be addressed in a coordinated plan.

Redomestication directly addresses the domicile component by transferring the entity’s home state. When implemented correctly and paired with clean operational facts (for example, an actual cessation of Illinois operations), redomestication can support the broader goal of reducing unnecessary compliance and limiting continued exposure to Illinois filing and fee obligations. The practical value is not theoretical: the best way to move a company out of Illinois is the path that reduces long-term “two-state” administrative drag rather than merely shifting it to a different filing category.

Because tax nexus depends on facts, owners should be cautious about simplistic claims that any single filing “stops taxes.” The superior approach is to complete a legally valid redomestication and then ensure that operational changes, registrations, and account updates align with the new corporate reality. For a structured overview of the process, consult the best way to move a company out of Illinois with a statutory conversion.

Why Illinois litigation risk and governance friction matter when selecting the best way to move a company out of Illinois

Owners often underestimate how much business climate is influenced by governance rules and litigation posture. The best way to move a company out of Illinois should be evaluated not only by filing fees, but also by what happens after the move: which state’s statutes govern internal affairs, how disputes among owners are adjudicated, and what statutory tools exist for handling deadlock, member dissociation, or fiduciary duty claims.

Redomestication is particularly valuable because it is a clean legal mechanism: it changes the jurisdiction of the entity without creating a new business and without transferring assets to a different entity. In many cases, a “new entity plus assignment” approach introduces avoidable contractual issues, including consent requirements, anti-assignment clauses, lender covenants, or government contract restrictions. A well-planned redomestication is often the best way to move a company out of Illinois precisely because it minimizes the downstream legal noise that triggers disputes, delays, or renegotiations.

Companies with multiple owners should also treat governance documents as part of the move. An operating agreement or bylaws may require member or shareholder approvals, notice periods, or specific voting thresholds. The correct solution is not to “wing it” but to build a board/member resolution package that is consistent with the governing documents and the statutory conversion framework.

Redomestication versus foreign registration: the compliance trap many businesses do not recognize

Foreign registration can be appropriate when a company intends to keep operating in Illinois while also operating elsewhere. However, it is frequently recommended even when the company’s Illinois operations have ended. In those circumstances, foreign registration is not the best way to move a company out of Illinois; it is often a way to remain tethered to Illinois indefinitely.

Foreign registration typically preserves the Illinois entity as the domestic company and adds a second registration in the new state. That can mean ongoing annual reports, registered agent costs, and continued administrative exposure in two jurisdictions. In addition, foreign registration can create confusion with banks, counterparties, and internal stakeholders about where the company is actually “from,” which is more than a branding issue—it is a legal and compliance issue.

By contrast, redomestication is purpose-built for a permanent relocation of domicile. For businesses seeking the best way to move a company out of Illinois while minimizing continuing Illinois obligations, the more rational solution is to move the home state rather than to add a second home. See the best way to move a company out of Illinois without dual-state headaches for an explanation of how continuity is preserved.

Redomestication versus merger: avoiding unnecessary complexity and accidental tax consequences

A merger is a legitimate corporate tool, but it is commonly overused when owners simply want a change of domicile. In practice, many “move the company” merger plans require forming a new entity in the destination state and then merging the Illinois entity into it. That approach can create a cascade of issues: new EIN assumptions, contract assignments, third-party consents, and state-level filing complexity.

From a risk-management standpoint, a merger is rarely the best way to move a company out of Illinois if the objective is continuity with minimal operational disruption. Merger documentation is typically more extensive, and the possibility of technical defects (for example, a flawed plan of merger, incorrect member approvals, or missed state filings) can create later title or authority questions. Those problems can surface at the worst time—during financing, an acquisition, or a dispute among owners.

Redomestication, in contrast, is structured to preserve the entity’s identity. The company generally maintains its existing contracts, keeps its FEIN, and, in most cases, retains its name. For owners who want the best way to move a company out of Illinois while keeping the business intact, that continuity is not merely convenient; it is legally and commercially decisive.

Common misconceptions that undermine the best way to move a company out of Illinois

Mistake #1: dissolving the Illinois company as a first step. Dissolution is the opposite of continuity. Once a company is dissolved, owners often discover that bank accounts, licenses, payment processor profiles, merchant services, and contracts are not easily “ported” to a newly formed entity. Dissolution can also introduce unnecessary wind-up formalities and operational downtime. For most going concerns, dissolution is not the best way to move a company out of Illinois; it is a method that forces the business to restart its legal life.

Mistake #2: assuming contracts automatically follow a new entity. Many commercial agreements restrict assignment or require consent. Even if a counterparty is willing, the administrative burden can be substantial, and the negotiation leverage may shift. Redomestication is compelling because it avoids the need to “move” contracts to a different company; the company remains the contracting party.

Mistake #3: treating “address changes” as a legal relocation. Updating a mailing address does not change the entity’s home state, nor does it resolve compliance obligations. The best way to move a company out of Illinois is the approach that aligns the company’s domicile, governance documents, tax compliance posture, and operational footprint into a single coherent structure.

Procedural considerations: approvals, filings, and what should be updated after the move

In a properly handled redomestication, the transaction is planned around the entity type (LLC, corporation, or partnership), ownership approvals, and state filing mechanics. Owners should expect to address (i) internal authorization documents (member consent, board resolution, or shareholder approval), (ii) conversion or domestication filings in the relevant jurisdictions, and (iii) coordination with registered agents and state offices. The best way to move a company out of Illinois is not merely “filing a form”; it is a controlled legal process with documentation that must align across the company’s records.

After approval, the company should complete a disciplined post-move checklist. At a minimum, that typically includes updating bank records, payroll and HR systems, insurance policies, state and local licenses, and internal governance documents. It also includes ensuring that customers and vendors have the correct legal name and jurisdiction on invoices and W-9s. These practical steps are where many do-it-yourself efforts fail—not because the owner lacks intelligence, but because redomestication is a multi-system change that requires coordination.

For businesses that value speed and certainty, it is prudent to use a standardized, attorney-driven workflow rather than improvising across multiple agencies. The objective is not simply to “leave Illinois,” but to do so in a manner that is defensible, auditable, and operationally seamless.

Conclusion: the best way to move a company out of Illinois is the one that preserves your company’s identity

For most operating businesses that have permanently relocated operations, the best way to move a company out of Illinois is the approach that preserves continuity: the same entity, the same FEIN, the same contracts, and—most often—the same name. Redomestication is specifically designed to accomplish that result without forcing owners into dissolution, merger complexity, or perpetual dual-state compliance.

If your objective is to exit the Illinois business climate while maintaining the value you have already built—credit history, customer relationships, vendor agreements, and branding—then redomestication should be evaluated first, not last. To proceed with an efficient, flat-fee process, visit the best way to move a company out of Illinois by redomesticating your business and confirm the correct pathway for your entity type and facts.

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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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