Best way to move a company out of Rhode Island

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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

4. Approved! ✅

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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 Rhode Island 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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How sophisticated owners identify the best way to move a company out of Rhode Island

When executives evaluate the best way to move a company out of Rhode Island, they should begin with a disciplined distinction between operational relocation and entity relocation. Relocating employees, facilities, and customers is a business decision; relocating the company’s legal domicile is a legal decision with tax and compliance consequences. When these are conflated, owners often incur avoidable expense, lose continuity protections, or create unnecessary tax filings in multiple states.

In my experience as an attorney and CPA, the best method for moving a Rhode Island company to another state is the approach that preserves continuity while minimizing administrative drag. That typically means a statutory conversion—commonly referred to as redomestication—so the entity changes its “home state” without becoming a different company. For most owners, the best way to move a company out of Rhode Island through redomestication is the most direct path to improved governance, streamlined compliance, and cleaner tax positioning.

Why exiting the Rhode Island tax environment can be a rational business decision

For many businesses, Rhode Island’s tax and compliance environment can create friction that is disproportionate to the company’s current operations footprint. Owners frequently discover that they are funding filings, registered agent obligations, and recurring administrative requirements in a state where they no longer conduct meaningful activity. The “cost” is not merely dollars; it is management time, risk exposure, and the cumulative burden of errors that occur when compliance becomes a secondary priority.

Accordingly, when evaluating the best way to move a company out of Rhode Island, decision-makers should focus on whether the entity’s legal domicile still matches the company’s commercial reality. If operations, leadership, and strategic planning have migrated elsewhere, maintaining Rhode Island as the home state can create misalignment that invites unnecessary scrutiny and ongoing complexity. A properly executed redomestication can help reconcile domicile with reality—without forcing a disruptive restart.

In addition, owners should be wary of a common misconception: that “moving” the business automatically ends Rhode Island obligations. It does not. The cleanest outcomes occur when counsel coordinates legal and tax steps so that the company does not accidentally preserve nexus, fail to close accounts, or maintain legacy registrations. For that reason, the best way to move an existing company out of Rhode Island is typically a structured statutory conversion supported by a clear compliance exit plan.

Why redomestication is frequently the best mechanism to move a Rhode Island entity

When owners ask for the best way to move a company out of Rhode Island, they are often deciding among three broad routes: (i) forming a new entity and “starting over,” (ii) registering the existing entity as a foreign entity in the destination state, or (iii) redomesticating the existing entity. Of these, redomestication is frequently superior because it is designed specifically to transfer domicile while maintaining the entity’s legal continuity.

Redomestication is persuasive not because it is novel, but because it is practical. Properly handled, it allows the company to retain its federal employer identification number (FEIN), maintain existing contracts, and preserve its operating history—often including the company’s name. Owners can continue operations without the hidden “rewrite everything” project that accompanies entity replacement. For businesses with vendor agreements, licensing, payment processing relationships, or banking covenants, this continuity can be decisive.

From a governance standpoint, redomestication also reduces the likelihood of downstream disputes. A transaction that preserves the entity reduces ambiguity about which party is bound by legacy obligations. It also helps avoid operational disruption, such as re-onboarding with payroll providers, re-papering leases, or refreshing customer contracts solely because the company “became” a new legal person. Those are precisely the outcomes that most owners are trying to avoid when searching for the best way to move a company out of Rhode Island.

Foreign registration: why “doing business elsewhere” is not the same as relocating domicile

Foreign entity registration is often marketed as a quick solution. However, it is frequently misunderstood. Registering in another state generally means the Rhode Island entity remains a Rhode Island entity; it simply has permission to operate elsewhere. That may be appropriate for a company that still meaningfully operates in Rhode Island, but it is often inefficient for a business that has permanently relocated.

If the company’s real-world presence has left Rhode Island, foreign registration can create the very dual-state burden owners are trying to eliminate: two annual report calendars, two sets of state fees, and the continuing need to maintain Rhode Island good standing. Worse, business owners sometimes assume foreign registration “moves” the company and then allow Rhode Island compliance to lapse, which can trigger penalties, administrative dissolution, or complications when financing, contracting, or selling the business.

Therefore, when evaluating the best way to move a company out of Rhode Island, foreign registration should be treated as a tool for multi-state operations—not a substitute for changing domicile. If the objective is to exit Rhode Island as the home state while preserving continuity, the best way to move a Rhode Island company to a new state without operational disruption is typically redomestication, not a second registration layered on top of the first.

Merger and dissolution: why “more complicated” is not “more correct”

Merger-based strategies can sometimes accomplish an end result similar to domicile change, but they often introduce unnecessary complexity. A merger requires additional entities, board or member approvals, and a transaction structure that can create avoidable legal and accounting work. It may also force third-party consents, trigger change-of-control provisions, or complicate contractual representations—particularly in regulated industries or where customers require strict vendor onboarding.

Dissolution, similarly, is frequently recommended by non-specialists who underestimate the downstream damage. Dissolving and restarting commonly breaks continuity: it may require new bank accounts, new merchant accounts, new payroll IDs at the state level, and contract novations. It can also complicate due diligence if the company later seeks investment or sale, because the historical entity no longer exists as a continuing legal person. In the worst cases, owners dissolve first and later discover that they needed the old entity’s standing to resolve disputes, collect receivables, or complete licensing renewals.

As a matter of risk management, the best way to move a company out of Rhode Island is the approach that achieves the objective with the least collateral damage. For most established businesses, that is not “shut it down and start again.” It is a statutory conversion that keeps the corporate vehicle intact. For a detailed overview of this mechanism and how it preserves the company’s FEIN and contracts, see the best way to move a company out of Rhode Island using redomestication.

Continuity advantages that matter: FEIN, contracts, and the company name

Owners often underestimate the value of continuity until it is lost. The FEIN, for example, is more than a number; it is embedded in payroll systems, benefits plans, vendor W-9 records, banking files, and tax accounts. Changing it can create cascading administrative issues, including mismatched filings and avoidable correspondence that consumes internal time and external professional fees. Preserving the FEIN is one of the most concrete reasons redomestication is often the best way to move a company out of Rhode Island.

Contracts are the second continuity flashpoint. Many commercial agreements contain assignment restrictions, change-of-entity clauses, or consent requirements that are triggered when a business attempts to “transfer” a contract to a new company. A conversion-based relocation is designed to avoid forcing these problems in the first instance, because the entity is not replaced; it continues. That means the company typically keeps its vendor agreements, customer terms, leases, and subscription relationships in place—reducing operational disruption and legal exposure.

Third, the company name often carries material goodwill. Rebranding because of a forced name change can dilute marketing investments and introduce confusion among customers and lenders. Redomestication is frequently the best way to move an existing Rhode Island company while preserving brand identity, because it is generally structured to maintain the company’s name in most cases. This is particularly important for businesses with established search presence, industry recognition, and consistent invoicing practices.

Procedural considerations and common misconceptions that require professional guidance

Statutory conversion is straightforward in concept, but it is not a do-it-yourself exercise for a serious company. The legal steps must be sequenced correctly to avoid lapses in good standing, unintended tax filings, or documentation that fails to match statutory requirements. For example, owners should anticipate issues such as: whether the destination jurisdiction permits inbound conversions for the entity type, how the governing documents must be updated, whether internal approvals require specific voting thresholds, and how state filing timelines will align with licensing and banking requirements.

Another misconception is that a company can simply “change the address” and be done. A domicile move is not an address change; it is a statutory re-homing of the entity. Similarly, owners sometimes believe that a merger is inherently safer because it is more common. In practice, a merger can be riskier when it is used as a substitute for conversion, because it introduces a second entity and a transaction that can complicate tax reporting and contract continuity.

For these reasons, when an owner asks me for the best way to move a company out of Rhode Island, my advice is to treat the project like a controlled compliance transaction: define the business objective, confirm statutory eligibility, align governance approvals, and implement a documentation package that supports continuity. A practical starting point is the best way to move a company out of Rhode Island with a redomestication filing, which is designed to be efficient while preserving the company’s existing identity.

Conclusion: the best outcomes come from a continuity-first relocation strategy

The best way to move a company out of Rhode Island is the method that accomplishes a true change of domicile while preserving the company’s operational integrity. For established businesses, redomestication provides a compelling balance of continuity, efficiency, and reduced administrative burden. It is specifically designed to move the company’s “home state” without forcing owners to rebuild the corporate structure, renegotiate contracts, or disrupt payroll and banking systems.

If the goal is to leave the Rhode Island legal and tax environment behind while maintaining the company’s FEIN, contracts, and (in most cases) its name, statutory conversion is ordinarily the superior approach. To proceed with a streamlined process supported by an attorney and CPA, review the best way to move a company out of Rhode Island by redomesticating and begin the filing steps as soon as practical.

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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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