Best way to move a company out of North Dakota

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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 North Dakota 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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Why the best way to move a company out of North Dakota is a true change of domicile (not a patchwork workaround)

When clients ask me, as both an attorney and a CPA, what is the best way to move a company out of North Dakota, the analysis begins with a simple premise: a business must be able to change its legal “home state” without breaking what already works. Owners typically want to preserve their existing operations, personnel, banking relationships, and customer-facing identity while achieving a meaningful shift away from North Dakota’s ongoing compliance footprint. In that context, a properly executed redomestication (statutory conversion) is designed to accomplish precisely that objective.

The best way to move a company out of North Dakota is not merely obtaining permission to operate elsewhere; it is ending the need to maintain parallel obligations in North Dakota when the business has, in substance, moved. Foreign registration often leaves an entity tethered to North Dakota through annual reports, registered-agent requirements, and continued filing exposure driven by nexus rules. By contrast, redomestication focuses on relocating the entity’s state of formation itself, which is the legal anchor for many recurring obligations.

For businesses that are ready to relocate their center of gravity, the best way to move a company out of North Dakota through redomestication is to pursue a process that preserves continuity: the company remains the same entity, with the same history, the same FEIN, and the same contractual posture, while the state of domicile changes. That combination—continuity plus relocation—is the central value proposition.

Redomestication (statutory conversion): the best way to move a company out of North Dakota while preserving continuity

Redomestication, as applied here, is the legal process of transferring the company’s domicile from North Dakota to a new state by statutory mechanism rather than by dismantling and rebuilding the entity. In practical terms, this means the company does not “die” in North Dakota and get “reborn” elsewhere. Instead, it remains the same business entity, and the public record reflects a change in its home jurisdiction. From a risk-management perspective, that distinction is consequential.

In my experience, the best way to move a company out of North Dakota is the method that minimizes collateral damage. Redomestication is structured to maintain the company’s existing FEIN, and it generally allows the company to keep its name. More importantly, because the entity remains the same, contracts typically remain in force without the administrative burden of executing mass assignments or obtaining third-party consents that are often needed when assets or operations are moved into a newly formed company. This is precisely why redomestication is so frequently superior to “start over” approaches.

For owners who want an orderly and legally coherent exit from North Dakota’s entity framework, the best way to move a company out of North Dakota without disrupting contracts and the FEIN is to pursue redomestication rather than layering on foreign registrations or engineering a merger that adds complexity without adding value.

Advantages of exiting the North Dakota tax environment and compliance posture

Businesses commonly associate relocation with lower taxes; however, the more precise objective is frequently the reduction of avoidable compliance friction. North Dakota obligations can persist when a company remains domestically formed there, even if the owners and operations have moved. The best way to move a company out of North Dakota is therefore the path that supports a clean break from ongoing North Dakota entity maintenance where the facts justify it.

Owners often underestimate how easily North Dakota filing duties can continue after an “informal move.” For example, foreign registration in the destination state can create the misconception that the company has “left” North Dakota, when in reality the company remains a North Dakota entity and may still face annual reports, state-level administrative requirements, and potential questions tied to nexus and apportionment depending on business activity. Redomestication is aimed at resolving the domicile question directly, which is typically the correct legal lever to pull when operations have permanently shifted.

As part of a well-designed exit plan, the best way to move a North Dakota company to a new state with fewer ongoing obligations is to align the company’s legal domicile with its real-world operations and management, thereby reducing the likelihood of conflicting compliance demands.

Advantages of leaving the North Dakota legal system and governance framework

A company’s domicile is not merely an administrative label; it often determines which state’s statutes govern core internal affairs, including fiduciary duties, member or shareholder rights, governance defaults, and the mechanics for future restructuring. Accordingly, the best way to move a company out of North Dakota includes selecting a new legal home that better matches the business’s growth plan, risk tolerance, and investor expectations.

Businesses that anticipate outside investment, multi-state expansion, or more sophisticated governance often want modernized statutory options and predictable administration. Redomestication is particularly persuasive in this context because it relocates the company’s charter state without requiring the enterprise to renegotiate its identity at every touchpoint. A merger, by contrast, can introduce avoidable legal and procedural questions, including whether counterparties must consent, whether licensure and permits transfer seamlessly, and whether the “surviving” entity truly preserves the desired history and operational posture.

For decision-makers seeking substance over optics, the best way to move a company out of North Dakota and modernize its governing law is to change the domicile itself through redomestication rather than leaving the entity anchored to North Dakota and attempting to solve governance issues by contract alone.

Why foreign registration is often not the best way to move a company out of North Dakota

Foreign registration is frequently presented as a quick solution because it can be completed relatively easily in many states. The problem is conceptual: foreign registration does not change the company’s home state; it simply authorizes a North Dakota entity to do business elsewhere. For companies that have permanently relocated, that approach can become an expensive and distracting long-term compromise, not an exit strategy.

In practice, foreign registration commonly results in dual compliance: one set of filings and fees in North Dakota and another set in the destination state. This can also create confusion about where governance disputes should be resolved and which statutory regime applies to internal affairs. The best way to move a company out of North Dakota is the strategy that eliminates the need to maintain the former domicile’s entity lifecycle—assuming, again, that North Dakota operations are truly discontinued and the facts support that position.

Owners also misunderstand the interplay between “registration” and “tax exposure.” Registering as a foreign entity does not inherently solve nexus concerns, and it may invite the false comfort that “we took care of North Dakota.” A disciplined redomestication plan, coupled with appropriate compliance follow-through, is typically the more defensible and efficient legal posture.

Why mergers and dissolutions create unnecessary risk when the goal is simply to relocate

Mergers are powerful tools when there is a true business purpose—acquiring another company, combining operations, or consolidating ownership. They are not, however, the default answer when the objective is merely relocation. In many cases, a merger introduces avoidable layers of documentation, approvals, and potential contract and licensing issues, all to accomplish what redomestication can achieve more directly.

Dissolution is often worse. Dissolving the North Dakota entity and forming a new entity elsewhere may appear “clean,” but it can impose material costs and operational disruption. Common consequences include having to open new banking relationships, re-paper vendor agreements, update customer contracts, and navigate the administrative fallout of “closing” one entity while “opening” another. In addition, dissolution can create timing and reporting complexities that owners do not anticipate until they are already committed.

For that reason, the best way to move a company out of North Dakota is generally the route that avoids artificial transactions. Redomestication is engineered to preserve continuity while changing the domicile, thereby reducing the likelihood of downstream disputes over assignments, successor liability misconceptions, and administrative errors that can take months to unwind.

Operational continuity: preserving contracts, the FEIN, and (in most cases) the company name

Continuity is not an abstract preference; it is a measurable business asset. Many companies have years of vendor onboarding, customer contract templates, lending relationships, and compliance profiles tied to a single entity identity. The best way to move a company out of North Dakota is the process that treats these items as assets to be protected, not inconveniences to be replaced.

Redomestication is compelling because it generally allows the company to maintain its existing contracts without the disruption that accompanies transferring assets to a new entity or merging into a new “survivor.” Similarly, preserving the existing FEIN reduces the administrative churn that can cascade into payroll reporting, vendor payments, 1099 processes, and financial system integrations. These are not theoretical concerns; they are the routine operational pressures that derail poorly planned relocations.

Finally, the ability to keep the company name in most cases is more than branding. It protects goodwill, customer recognition, and existing search engine visibility that the business has already paid for—often through significant time and marketing expenditures. A well-executed redomestication plan is designed to protect these intangible but valuable interests.

Common misconceptions that cause North Dakota exits to become expensive

Misconception #1: “If we register elsewhere, we have moved.” As noted, foreign registration is permission to do business in a new jurisdiction; it is not a change of domicile. When owners proceed on this misunderstanding, they later discover that North Dakota obligations remain, and the “move” has created duplicative complexity rather than resolving it.

Misconception #2: “We should dissolve and start fresh for simplicity.” Dissolution can be the opposite of simple when contracts, licenses, bank relationships, and credit history are tied to the existing entity. The best way to move a company out of North Dakota is typically the option that avoids reconstructing the corporate identity and the paperwork ecosystem around it.

Misconception #3: “A merger is always the professional approach.” A merger can be elegant in the right setting, but relocation alone rarely justifies the added procedural weight. Redomestication is usually the more direct, cost-effective, and continuity-preserving path when the company’s underlying business remains unchanged.

Conclusion: selecting the best way to move a company out of North Dakota requires disciplined legal execution

Relocating a business entity is not a branding exercise; it is a legal change with tax, compliance, and governance implications that can persist for years. In well-founded scenarios—particularly where North Dakota operations have ceased and the enterprise has permanently relocated—the best way to move a company out of North Dakota is redomestication because it changes the company’s domicile while preserving the entity’s identity, contracts, FEIN, and operational continuity.

Equally important, redomestication reduces the risk of “dual-state limbo,” where a business unintentionally maintains obligations in North Dakota while attempting to build in a new state. That limbo is expensive, distracting, and wholly avoidable with proper planning.

For owners who require a defensible, continuity-preserving exit from North Dakota’s entity framework, the best way to move a company out of North Dakota is to begin a redomestication filing and complete the process with competent legal oversight, appropriate documentation, and clear post-approval compliance steps.

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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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