How to move a company out of Delaware

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The Redomestication Process in a Nutshell

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2. We prepare the legal docs.

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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! ✅

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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 Delaware 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 Delaware without disrupting operations

When business owners ask how to move a company out of Delaware, the issue is rarely academic. The decision typically follows a change in where the business truly operates, where its owners reside, or where future growth is expected. In those circumstances, maintaining a Delaware domicile can become an unnecessary source of cost and exposure, particularly when Delaware annual obligations and formalities remain in place despite the business having moved elsewhere in substance.

From the perspective of an attorney and CPA, the most prudent approach to moving a business out of Delaware is to select a transaction that preserves continuity. Redomestication (also referred to as statutory conversion, as described on our firm’s redomestication resource) is designed to accomplish precisely that objective: it transfers the entity’s home state while maintaining the same legal entity, so the company continues forward with minimal disruption.

For companies seeking a clear, efficient answer to how to relocate a Delaware entity to a new state, the most reliable starting point is a structured, attorney-led process. To review the firm’s process and pricing, consult how to move a company out of Delaware via redomestication and confirm the timeline and required inputs.

Why leaving Delaware can be a rational business decision

Delaware’s reputation is often presented as universally beneficial; however, that reputation is not a substitute for fit. For many closely held businesses, the practical result of remaining in Delaware is an ongoing obligation to maintain Delaware compliance that provides no meaningful operational advantage once the company’s people, revenue, and decision-making have relocated. In those cases, business owners exploring how to move a company out of Delaware are often responding to real-world friction rather than theoretical legal advantages.

First, Delaware’s continuing fees and annual filings can become a persistent drain, particularly when layered on top of compliance obligations in the state where the company actually operates. Second, maintaining a Delaware domicile can pull the company into a legal environment that is not aligned with the day-to-day realities of a small or mid-sized business. Third, Delaware’s business climate may be optimal for certain venture-backed profiles, but it is not automatically optimal for every entity type, ownership structure, or tax posture.

Accordingly, the decision to move a Delaware company’s domicile should be evaluated as a business optimization initiative: reduce friction, reduce redundant compliance, and place the entity under the laws and administrative systems of the state that best matches its operations. In practice, these benefits are best realized when the chosen method to move out of Delaware preserves the company’s identity and continuity.

Redomestication: the best mechanism for moving a Delaware entity to another state

If the goal is to move the company’s home state while keeping the company intact, redomestication is purpose-built for the task. Unlike strategies that effectively create a new entity, redomestication is designed to continue the same company as the same taxpayer and contracting party, with the primary change being the state of formation. This is why, when the question is how to move a company out of Delaware without operational disruption, redomestication is often the superior mechanism.

The practical benefits are not merely cosmetic. In most cases, redomestication allows the business to keep its existing federal employer identification number (FEIN), maintain existing contractual relationships, and continue using its established business name. These are not incidental details; they are the features that protect revenue continuity. When a company changes its FEIN or becomes a different contracting party, banks, payment processors, key vendors, and enterprise customers often require re-underwriting, revised contracts, and new compliance onboarding.

For that reason, business owners who want an orderly and defensible approach should review how to move a company out of Delaware through redomestication rather than defaulting to the common but inferior alternatives discussed below.

Exiting Delaware’s tax environment: what owners frequently overlook

Many owners initially focus on the headline issue of “taxes,” yet the actual problem is often broader: multi-state compliance and the administrative cost of remaining tethered to Delaware after operations have moved. Even where tax nexus analysis is nuanced, a Delaware domicile can create a recurring cycle of annual obligations, registered agent costs, and entity maintenance that does not advance the business’s objectives. For companies evaluating how to move a company out of Delaware, the question should be framed as total compliance burden, not merely a single tax line item.

Common misconceptions deserve particular attention. A frequent misunderstanding is that registering as a foreign entity in the new state “solves” the relocation problem. It rarely does. Foreign registration generally results in dual-state compliance: the company remains a Delaware entity and must continue Delaware maintenance, while also complying with the new state’s rules. This approach can be defensible when Delaware operations remain active, but it often fails the cost-benefit test when the move is permanent.

Another misconception is that a dissolution and “fresh start” is a clean solution. Dissolution can trigger practical and tax complications, including the need to re-paper contracts, reissue payment credentials, reestablish credit, and potentially create avoidable scrutiny through entity-level changes. By contrast, redomestication focuses on continuity, which is the single most effective way to reduce downstream friction when leaving Delaware.

Contract continuity: the central reason redomestication outperforms mergers and new formations

In legal and financial terms, the most expensive problems are often the ones that appear months after a “simple” relocation. Contracts are a primary example. Many commercial agreements restrict assignment or require consent before a contracting party can be changed. A merger or dissolution-and-reformation strategy can inadvertently create an assignment issue, forcing the business to seek consents, amend documents, or renegotiate terms under pressure.

Redomestication is structured to avoid that outcome by continuing the same entity. When owners ask how to move a company out of Delaware while keeping customer and vendor agreements stable, the correct response is to prioritize a method that does not turn the company into a new party. This is particularly important for businesses with subscription revenue, long-term service arrangements, licensing relationships, or government and enterprise customers with strict vendor onboarding requirements.

For a practical outline of this continuity-focused approach, see how to relocate a Delaware company without breaking contracts. The goal is not merely to “file paperwork,” but to preserve the legal identity that your contracts, banking relationships, and counterparties already recognize.

Preserving the FEIN and business identity: the compliance advantages owners can measure

From a CPA’s perspective, preserving the FEIN is not a minor convenience; it is an operational safeguard. A change in FEIN can cascade into payroll tax account updates, benefit plan administration complications, vendor 1099 reporting issues, and internal accounting disruptions. For companies with employees or contractors, a new FEIN frequently means weeks of administrative cleanup and the risk of avoidable filing errors.

From an attorney’s perspective, continuity of identity also reduces legal risk. If the same entity continues after the move, the company’s standing in negotiations, disputes, and compliance matters is clearer. The company remains the same party that owns the historical record, and counterparties are less likely to challenge authority, signatures, or obligations. When determining how to move a company out of Delaware in a manner that withstands scrutiny, continuity is the defensible posture.

In most cases, redomestication also allows the business to keep its name. That matters for brand equity, market recognition, and the practical reality that name changes ripple through licensing, banking, vendor portals, and customer communications. When the objective is to relocate out of Delaware without “starting over,” redomestication is aligned with how businesses actually operate.

Procedural considerations that determine whether a Delaware exit is truly complete

Many relocation efforts fail not because the concept is flawed, but because the implementation is incomplete. Owners may believe they have solved how to move a company out of Delaware when they file in a new state, yet the Delaware entity remains active and continues accruing obligations. A proper strategy must be designed to achieve a true change of domicile, not merely an additional registration.

Procedurally, the entity’s internal governance must be handled correctly. That includes approvals consistent with the company’s operating agreement, bylaws, shareholder arrangements, and any lender or investor covenants that may require notice or consent. In addition, the documentation must be consistent across jurisdictions to ensure the new state recognizes the continued entity and Delaware appropriately reflects the departure.

Finally, post-approval housekeeping matters. After the move, companies typically need a checklist to update banks, payroll providers, state tax registrations, business licenses, and internal records. A professional process should anticipate these requirements rather than leaving owners to discover them one by one, after disruptions have already occurred.

Conclusion: a disciplined approach to moving out of Delaware should prioritize continuity

For business owners evaluating how to move a company out of Delaware, the decisive question is not whether a filing can be made; it is whether the company can relocate while preserving the operational, contractual, and tax identity that keeps the business running. Redomestication is superior because it is designed to continue the same entity, generally allowing the business to maintain its FEIN, preserve contracts, and retain its name in most cases, all without interrupting operations.

Foreign registration often creates dual compliance, mergers can introduce unnecessary complexity and consent issues, and dissolution frequently creates avoidable downstream problems. A well-executed redomestication strategy addresses the real objective: leaving Delaware’s environment while keeping the business intact.

To take the next step with a structured, attorney-led process, review how to move a company out of Delaware using redomestication and proceed with a method that preserves what your business has already built.

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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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