How to move a company out of California

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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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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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How to move a company out of California without interrupting operations

As counsel and a CPA, I approach the question of how to move a company out of California as both a legal continuity exercise and a compliance-risk reduction project. The objective is not merely to “set up” a business elsewhere; it is to change the company’s home state while preserving the very items that make the enterprise valuable: existing contracts, banking relationships, vendor terms, customer agreements, insurance arrangements, and—critically—its federal employer identification number (FEIN).

For that reason, the most reliable answer to how one should move a company out of California is typically redomestication (also described as statutory conversion). When implemented correctly, it is specifically designed to relocate the entity’s domicile while maintaining continuity, thereby avoiding the operational friction and legal uncertainty that often accompany dissolutions, mergers, or “workaround” strategies.

Businesses seeking a streamlined path should begin by reviewing how to move a company out of California through redomestication, including eligibility, timing expectations, and the state-to-state filing sequence. Proper planning at this stage protects the company’s brand identity and reduces the risk of creating dual compliance obligations.

Why moving a business out of California can materially improve tax and compliance outcomes

When owners evaluate how to move a company out of California, the analysis often begins with taxes, and for good reason. California’s tax environment, ongoing filing expectations, and enforcement posture can create recurring friction for businesses that have operationally relocated. A thoughtful exit strategy may reduce recurring state-level exposure and administrative cost, particularly where the company has ceased California operations and does not intend to re-establish them.

In practice, many organizations underestimate how easily ongoing compliance follows them. A common misconception is that “moving the office” ends the matter. In reality, the state’s view of continuing obligations frequently depends on facts such as ongoing sales, employees, management activity, or retained California presence. Accordingly, addressing how to move a company out of California should include a disciplined review of what must stop, what must be transitioned, and what must be formally updated so that the company’s footprint aligns with its new domicile.

To proceed efficiently, decision-makers should use a process engineered to reduce administrative duplication. A properly structured redomestication is frequently the cleanest legal mechanism for moving a California entity to another state while preserving continuity. For a detailed overview, see the redomestication approach for moving a company out of California.

Redomestication is the most direct legal mechanism for relocating an existing California entity

There are multiple legal transactions that people loosely describe as “moving” a business. However, when the precise question is how to move a company out of California without creating a different company, redomestication is specifically designed for that purpose. The process changes the entity’s governing state law while maintaining the entity itself as the same ongoing business.

This distinction matters. Redomestication allows the company to maintain its existing contracts and business relationships because the entity continues uninterrupted. In most cases, the company also retains its name and—importantly—its FEIN, which is often foundational to payroll, banking, merchant accounts, vendor onboarding, financing, and customer procurement systems. From a practical standpoint, preserving these items reduces the cascade of downstream updates that can otherwise consume leadership time and introduce avoidable errors.

Organizations that want the most efficient and continuity-preserving option should consider moving a company out of California by redomesticating it. When the filings are properly prepared and sequenced, the company can relocate its domicile while minimizing disruption to day-to-day operations.

Maintaining contracts, FEIN, and (in most cases) the company name: the decisive advantage

The commercial reality is straightforward: businesses are not merely legal shells. They are networks of contracts and relationships. Any credible explanation of how to move a company out of California must address how those relationships will remain enforceable and administratively intact. Redomestication is superior because it generally enables the company to preserve its contracts without forcing counterparties to sign new agreements simply because the owner chose a different state of domicile.

Similarly, maintaining the same FEIN is not a cosmetic benefit; it is a compliance and operational advantage. A change in FEIN can trigger burdensome updates across payroll providers, benefit plans, banking records, credit profiles, 1099 and W-2 workflows, and government accounts. Redomestication typically avoids those complications by keeping the same taxpayer identity at the federal level, even while the company’s home-state law changes.

Owners who have been told they must “start over” to relocate should reassess that advice. In many situations, the more prudent approach is to focus on how to move a company out of California while keeping the same entity, rather than incurring the cost and risk of rebuilding corporate infrastructure that already works.

Common mistakes when attempting to relocate a California company—and why they become expensive

One recurring error is confusing “moving” with “registering.” Businesses are sometimes advised to form or register in a new state while leaving the California entity intact, resulting in multiple entities or ongoing dual compliance. While foreign registration may be appropriate in limited cases, it is often misapplied when the real goal is to change the entity’s domicile. If the company has ceased California operations, foreign registration can leave owners paying for renewals, filings, and potential tax exposure that they believed they had left behind.

A second frequent mistake is selecting a merger or dissolution because it sounds decisive. Mergers can be unnecessarily complex and may require extensive documentation and additional legal coordination, and dissolutions can be catastrophic when undertaken prematurely. Dissolving a company can create avoidable disruption to banking, contracts, and licensing, and it may trigger unintended downstream issues that are difficult and expensive to reverse. In other words, dissolving is rarely an intelligent first step in a plan for how to move a company out of California.

The better course is to use a transaction that is designed for continuity and administrative efficiency. For many businesses, that means following a redomestication-based plan for moving a company out of California rather than relying on generic “move-your-LLC” guidance that ignores real-world legal and compliance consequences.

Procedural considerations that determine whether a relocation actually “sticks”

When owners ask how to move a company out of California, they often focus on the destination state’s filing. That is only part of the analysis. A proper relocation should also address the company’s internal governance and public-facing records so that the company’s operational reality aligns with its legal domicile. For example, corporate or company records, registered agent arrangements, and state filings must be consistent and properly maintained.

Additionally, business owners must avoid the assumption that a single filing automatically ends all California obligations. A defensible transition typically requires that California operations are truly discontinued and that ongoing ties are evaluated carefully. This is where professional oversight becomes valuable: the goal is to prevent a scenario in which a company believes it has left California, yet continues to be treated as subject to California compliance due to facts on the ground.

Accordingly, the most reliable way to implement how to move a company out of California is to use a process that is structured, document-driven, and monitored through state acceptance. The redomestication method described at this guide to moving a company out of California by redomestication is purpose-built for that outcome.

Conclusion: the most efficient answer to moving a company out of California is redomestication

The decision to exit California should be executed with the same rigor used to build the business in the first place. A well-structured approach to how to move a company out of California should preserve operational continuity, reduce administrative duplication, and minimize unnecessary legal complexity. Redomestication is often superior because it changes the company’s domicile while maintaining the company itself.

When a company uses redomestication, it can typically keep its FEIN, maintain existing contracts, and, in most cases, retain its name—all while avoiding the costly detours and disruptions that can accompany mergers, dissolutions, or poorly matched registration strategies. In a commercial environment where continuity is a competitive advantage, preserving the entity’s identity is not a technicality; it is the core objective.

For business owners who want a clear, continuity-focused plan, the next step is to review how to move a company out of California using the redomestication process and proceed with properly prepared filings. The cost of doing it incorrectly is frequently far higher than the cost of doing it right the first time.

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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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