How to Transfer or Move a Corporation from California to Texas

How to transfer a company to Texas: keep the EIN with no downtime [step-by-step]

How to transfer a corporation to Texas from New York [step-by-step]

How to transfer an LLC from New York to Texas [step-by-step]

How to transfer a corporation to Texas [step-by-step]

Business owners: how to move a corporation out of California [step-by-step]

Paramount leaving California? How small business owners can transfer their company to a new state...

California wealth tax: how to transfer your LLC or corporation to another state [step-by-step]

How small business owners are transferring their LLCs to Texas [step-by-step]

How to legally move a company to Texas without starting over [step-by-step]

Transferring your business to Texas with no downtime [step-by-step]

How to transfer a corporation to Texas and keep the EIN [step-by-step]

How to transfer your LLC to Texas with no downtime [step-by-step]

How to transfer a company to Texas: keep the EIN with no downtime [step-by-step]

How to transfer a corporation to Texas from New York [step-by-step]

How to transfer an LLC from New York to Texas [step-by-step]

How to transfer a corporation to Texas [step-by-step]

Business owners: how to move a corporation out of California [step-by-step]

Paramount leaving California? How small business owners can transfer their company to a new state...

California wealth tax: how to transfer your LLC or corporation to another state [step-by-step]

How small business owners are transferring their LLCs to Texas [step-by-step]

How to legally move a company to Texas without starting over [step-by-step]

Transferring your business to Texas with no downtime [step-by-step]

How to transfer a corporation to Texas and keep the EIN [step-by-step]

How to transfer your LLC to Texas with no downtime [step-by-step]

Redomestication, also known as redomesticating, refers to the lesser-known legal process of transferring or moving the "home state" of an existing corporation, partnership, or LLC 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, CPA, Esq., M.S.T., LL.M., CMA, CFE, CIA, CRMA, CISA, CITP, FCPA, PFS, CFP

Texas destination-state requirements

A redomestication into Texas is governed by Chapter 10, Subchapters C and D, of the Texas Business Organizations Code together with the law of California. The transaction requires a written Plan of Conversion, the approvals required by the governing documents and applicable law, a Certificate of Conversion, and, for a Texas filing entity, a Certificate of Formation. The Texas filing must be coordinated with the California outbound instrument so the same corporation continues without interruption.

Tax considerations when moving a corporation from California to Texas

California's individual income-tax brackets reach 12.3%, with an additional 1% Mental Health Services Tax on taxable income above $1 million. The resulting top marginal income-tax rate is 13.3%; it does not apply to every dollar of income. California also withholds State Disability Insurance from covered wages. The Employment Development Department's 2026 rates set SDI at 1.3%, up from 1.2% in 2025, with no taxable wage ceiling. SDI and personal income tax have different tax bases and should be shown separately when comparing employee or owner compensation.

California generally taxes C corporations at 8.84% and S corporations at 1.5%, subject to the applicable $800 minimum franchise tax and statutory exceptions. An LLC taxed as a partnership or disregarded entity generally owes an $800 annual tax. It can also owe a separate LLC fee when California total income reaches $250,000. The Franchise Tax Board's LLC guidance lists fee tiers from $900 to $11,790. That fee is based on the LLC's qualifying California income, not a separate charge imposed on every member. An LLC taxed as a corporation follows the corporate tax rules instead.

Eligible partnerships and S corporations may elect California's 9.3% pass-through entity tax. Senate Bill 132 extended the PTE elective tax through taxable years beginning before January 1, 2031. Beginning with the 2026 tax year, missing or underpaying the June 15 installment no longer automatically bars the election, but it can reduce the affected owners' credits. This election is optional and does not replace every other California business tax. Its value depends on owner eligibility and the interaction with federal deductions.

California's statewide base sales and use tax rate is 7.25%, including mandatory local components; district taxes increase the rate in many locations. Property taxes are generally based on Proposition 13's 1% base levy, with additional voter-approved indebtedness and assessment rules. A legal-entity conversion should be reviewed for ownership-change reporting and available exclusions, particularly when California real estate remains in the business. California currently imposes neither a separate estate tax nor an inheritance tax.

Redomesticating your corporation from California to Texas does not end California taxation while the business continues doing business in California. Offices, employees, or sufficient California sales can preserve nexus under FTB's doing-business rules. The owner's residence is a separate question: changing a company charter does not establish that its owner has ceased being a California resident. California-source income can remain taxable after a genuine personal move.

Before closing, calculate the final or continuing franchise-tax liability, any LLC fee, and the treatment of assets or elections affected by the transaction. The $800 tax generally is not prorated simply because the entity converts during the year. Coordinate the accepted Secretary of State filing with FTB returns, CDTFA permits, and EDD payroll accounts. Close each account only when its own legal requirements are satisfied, and retain evidence of when California operations actually ended.

The LLC fee tiers make gross-income sourcing particularly important: the fee rises from $900 at $250,000 of qualifying California income to $2,500 at $500,000, $6,000 at $1 million, and $11,790 at $5 million. A business with modest net profit can still cross a fee threshold. Review the California sourcing of receipts and the applicable estimated-fee payment, rather than treating the fee as a percentage of profit or assuming that a destination charter eliminates it.

Texas imposes no individual income tax and prohibits a tax on individuals' net income under Texas Constitution article VIII, section 24-a. Texas also has no conventional corporate net income tax. Its franchise tax, however, applies to many corporations, LLCs, and other taxable entities, including businesses treated as pass-through entities for federal income-tax purposes. A federal S corporation election or partnership classification does not, by itself, exempt the business from Texas franchise-tax law.

For 2026 and 2027 report years, the franchise-tax no-tax-due threshold is $2.65 million in annualized total revenue. The general rates are 0.375 percent for qualifying retail or wholesale businesses and 0.75 percent for other businesses, applied to the taxable margin apportioned to Texas. Eligible businesses with no more than $20 million in annualized revenue can use the EZ computation at 0.331 percent, subject to its separate rules. The Texas Comptroller's franchise-tax guidance provides the current thresholds and methods. The threshold is not a deduction from taxable margin and does not establish that all income above it is taxed at the general rate. The compensation deduction limit is $480,000 per person for these report years. Compare the available margin methods using the business's actual revenue, eligible costs, compensation, and Texas apportionment before choosing a computation method.

Businesses at or below the revenue threshold generally no longer file a No Tax Due Report for report years 2024 and later, but an applicable Public Information Report or Ownership Information Report remains required. The ordinary annual deadline is May 15. Texas's state sales tax is 6.25 percent, with local taxes bringing the combined rate as high as 8.25 percent. Sales-tax, unemployment, property-tax, and licensing obligations may continue even when no franchise tax is payable. Texas has no current separate estate or inheritance tax.

Redomesticating a corporation from California to Texas changes its governing jurisdiction. Actual tax savings depend on the owners' residence, the company's classification, and the location of its operations and receipts. Continuing employees, property, inventory, or qualifying sales in California can preserve that state's filing and payment obligations. Do not close an account merely because the Texas conversion documents have been accepted.

South Dakota v. Wayfair, Inc., 585 U.S. 162 (2018), permits sales-tax nexus without the former physical-presence prerequisite. 15 U.S.C. § 381 instead provides limited net-income-tax protection for specified solicitation of tangible-goods orders. Wisconsin Department of Revenue v. William Wrigley, Jr., Co., 505 U.S. 214 (1992), interprets that protection. These authorities address different taxes and activities. Review nexus separately for each state, including remote sales and post-move operations, before projecting that redomestication will eliminate a former state's tax burden.

Specific legal requirements to transfer a corporation to Texas from California

California has state-specific statutory, approval, filing, fee, and sequencing requirements that must be coordinated with Texas law. The requirements below are the origin-state requirements applicable to this transaction.

1. California permits outbound statutory conversions for both LLCs and corporations. An LLC can become a foreign LLC or other permitted foreign entity under the California Revised Uniform Limited Liability Company Act. A California corporation can convert into a foreign corporation or another permitted entity under the General Corporation Law. The Secretary of State's conversion guidance identifies the applicable entity combinations and filings. First determine whether your corporation will keep its present entity type in Texas. A relocation that also changes tax classification or legal form needs a broader analysis than a same-type change of state, even when both transactions use a certificate called a conversion.
2. Older descriptions of corporate outbound authority are outdated. Assembly Bill 1802, Chapter 31 of the Statutes of 2022, effective January 1, 2023, authorized conversion of a California corporation into a foreign corporation or foreign other business entity when the destination law permits it. The corporation no longer has to assume that only a merger can accomplish an interstate change of domicile. The destination's authorization still matters: confirm that its statute accepts this particular California entity and that its formation document establishes a continuation through conversion. A generic new-company registration is not sufficient evidence of that legal result.
3. Prepare the LLC plan under the LLC statute. Cal. Corp. Code § 17710.03 requires a Plan of Conversion covering the terms of conversion, the destination jurisdiction and entity form, and the manner of converting membership interests. It also addresses approval of the plan's principal terms and the governing documents that become binding at effectiveness. Show the members the destination operating agreement, including any changed voting threshold, management arrangement, or distribution provision. Reconcile the approved plan with the membership ledger. A one-member LLC should still retain its member's written approval; having only one owner does not make the statutory plan unnecessary.
4. Use the corporate approval provisions for a corporation. Cal. Corp. Code § 1151 and § 1152 govern permissible corporate conversions and approval of the plan. Review board action, the required shareholder vote, and any separate treatment of classes or series. The statute protects equal treatment within a class and addresses special approvals where shareholders would assume different roles or liabilities. Review applicable dissenters' rights before distributing approval materials. An LLC's member-consent provision is not the corporate voting rule. If the ownership economics are intended to remain unchanged, describe the exchange of each share class into the destination shares expressly.
5. The outbound public filing is a Certificate of Conversion. The Secretary of State publishes Form CONV-1A, revised February 2026, for covered conversions. For a California LLC converting into a foreign LLC or foreign other business entity, § 17710.06(a)(4) requires a certificate filed with the Secretary of State. Corporations follow the filing rules in § 1155. The form identifies both entities and the destination jurisdiction, includes the approval information, and calls for the relevant principal-office information. Use the California entity number shown in the state record. Match all names and effective-date provisions with the destination filing before submission.
6. A one-member LLC does not need to invent a second signer. Under § 17710.06(b), the LLC certificate is executed and acknowledged by all members of a member-managed LLC or all managers of a manager-managed LLC, unless the articles or operating agreement provide for a lesser number. Thus, the relevant number depends on actual management and governing-document requirements. Two printed signature lines on a form do not require adding an owner or appointing an unnecessary manager. Keep the member approval separate from the signer's authority to execute the public document, and include additional signature pages if the applicable rule requires more signatures than the form provides.
7. Corporate signatures require the prescribed officer capacities. The Secretary of State's execution instructions call for a signature from the chair, president, or a vice president and a signature from the secretary, chief financial officer, treasurer, or an authorized assistant in the listed categories. This is an officer-capacity requirement, not a rule that the business must have two shareholders. A person who validly holds the necessary offices can identify those capacities as appropriate. Verify the appointments in the corporate records before signing. The certificate is made under penalty of perjury, so its approval recital must accurately describe the action actually taken.
8. Complete the California service-agent information. The current CONV-1A form requires an agent for service of process when the converting entity is a California corporation, LLC, limited partnership, or registered general partnership. An individual agent needs the requested California street and mailing information; a registered corporate agent is identified according to the form's instructions. The converted entity cannot name itself as agent. This requirement should be handled even when the business expects to stop operating in California. Use the form's entity-specific address fields correctly and preserve a reliable means for receiving notices about obligations incurred before the conversion.
9. Use the current fees and submission instructions. CONV-1A lists a $150 fee when a California corporation is the converting entity and $30 for other covered conversions. The current packet directs paper filers to include the submission cover sheet, while online filing is available through the Secretary of State's business filing service. In-person submissions can incur the separate $15 handling charge shown in the instructions; certified copies and optional services are additional. Do not present a combined professional-service quote as the government filing fee. Check processing dates and allow time for a correction rather than assuming that mailing the packet establishes an effective conversion.
10. Coordinate the two jurisdictions and any change to the plan. Determine which filing establishes the legal effective time and whether the other jurisdiction requires certified evidence or a later confirmation. The closing instructions should identify the final approved destination documents and the person authorized to make a correction. If a requested revision changes consideration, ownership rights, or governance, review whether renewed approval is required. Do not release the California filing on an assumption that the destination will accept it unchanged. Keep the accepted documents and their effective dates together so banks and counterparties can trace the same company from California to Texas.
11. Statutory continuity preserves liabilities as well as property. The LLC effect provisions in § 17710.09 and the corporate provisions in § 1158 address continuation of the entity, its property, and its obligations. A conversion does not make existing debts or litigation disappear. The public filing also supplies the applicable termination of California domestic status without a separate voluntary liquidation for the same transaction. Confirm the appropriate effect provision for the actual entity and destination. Federal tax consequences, including EIN treatment and continued tax elections, must be assessed under federal rules instead of promised solely from California's entity-law continuity language.
12. Review contracts and California real estate before closing. A loan agreement can require consent to a change of jurisdiction even when the debtor remains the same legal entity. A lease or insurance policy can require notice or an endorsement. Identify those requirements and obtain written consents when necessary. If the company holds California real estate, ask the title company and tax adviser about ownership-change reporting and any applicable exclusion. A proportional-interest-preserving change of form should not automatically be described as a taxable conveyance, but statutory continuity alone does not complete assessor reporting or satisfy a lender's recording requirements.
13. Good standing and tax suspension need separate attention. Check the Secretary of State record and the Franchise Tax Board position before signing or filing. A certificate showing one agency's status may not resolve every tax suspension or delinquency. Obtain the certified status evidence required by Texas, using that state's age limit for the certificate. California LLC Statements of Information are generally biennial, while stock corporations generally file annually; keep the applicable filing current until the conversion is effective. The FTB doing-business rules also explain why a foreign entity can remain subject to California tax after its California domestic status ends.
14. Calendar the corporate creditor notice. Cal. Corp. Code § 1158(f) requires written notice of the conversion to be mailed within 90 days after effectiveness to known creditors and claimants whose addresses appear in the converting entity's records. Failure to give that notice does not invalidate the conversion, but the statutory notice duty remains. Prepare the mailing list before the old office closes and retain proof of mailing. Also recognize that the LLC and corporate continuity provisions expressly exclude specified California income-tax provisions from their same-entity rule. Consequently, the tax result must be analyzed separately from the preservation of title and contracts. For LLC approval, § 17710.03 generally requires all managers and a majority of each membership class, or the applicable greater operating-agreement vote; the required execution signatures are a separate issue.
15. Plan the final or continuing California compliance work. If operations remain in California, determine whether foreign qualification and an ongoing California agent are required. If the business leaves, coordinate the conversion with FTB returns, sales-tax permits, and employer accounts. California's $800 annual or minimum tax generally is not prorated merely because conversion occurs partway through a year, so review timing before the next taxable year begins. Do not mark a return final while activity requiring further returns continues. Preserve the approved plan, accepted filings, ownership records, tax determinations, and unresolved-notice schedule in the permanent closing file, and calendar the destination's first required report.

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