Moving an LLC from California to North Carolina

My question involves business law in the state of: California

I need to cancel my California registration and register in NC. NC registration is straightforward so I do not have questions about it.

The Secretary of State's web site says "File a Certificate of Dissolution (Form LLC–3) and Certificate of Cancellation (Form LLC–4/7), unless all the members vote to dissolve, in which case only Form LLC–4/7 is required."

My problem is with the word "dissolve". Since it's an ongoing entity, "dissolve" does not seem accurate. However, it is a legal term so in this situation the word may be perfectly okay. If so, and since all members would then vote to dissolve, do I only have to file a Certificate of Cancellation (Form LLC–4/7)?

Also, I assume that I can continue to use the same EIN. Is that correct?

Thanks for all help.

You can have a problem all you want, but if you are going to get rid of the California entity, you are killing it off. The fact that you personally are going to conduct more business under a new entity doesn't change that. Your other option is to just operate the foreign (California) entity in NC. Of course, you probably don't want to do that. The fees in NC are substantially less.

You need a new EIN. The IRS would allow the transfer of a single member LLC (which they consider a disregarded entity) to a new state but since yours appears to have multiple members the formation in NC would be considered a distinct new entity.

You cannot change the state of formation for your LLC -- you would be dissolving the California LLC, creating an entirely new North Carolina LLC (which will have a new EIN), and transferring the assets from one to the other. You should work with an accountant to ensure that you transfer the assets without creating any taxable events.

Thanks flyingron and Mr. Knowitall. I wasn't expecting those answers, then again that's why I'm here. :-)

Actually, the LLC may have only one member. Either it's just me, or me and my wife. Unfortunately I haven't located the docs yet to confirm because there's just way too much to unpack.

Is there another way that I can find out that info?

Search here for documents on file with the state.

The only info that's available online is "Available information includes the complete entity name, entity number, formation, registration or conversion date, status, jurisdiction, entity address, and the name and address of the agent for service of process." Any other request must be made by mail.

I was hoping to lock this up by the end of this month. Would sliding into February create any issues?

If you (and the potential other member) don't know if you are a single member entity, nobody else will. If you have an operating agreement, that will help. If you don't, how have you been treating the income from the LLC?

Unless you're annual franchise tax is due at the end of January, sliding into February isn't going to have any issues.

The potential other member is my wife, and we file jointly. Actually, tracking down the tax returns may be the best way to go. Either there is one or two K-1s (we're sub-chapter S). The operating agreement is still buried from the move.

If the Certificate of Cancellation doesn't require the members to be named, I'll be able to file by month end so I believe that will avoid the annual franchise tax.

If you're filing K-1's, you'll need a new EIN. It's not a disregarded entity no matter what you claim.

You can transfer the existing LLC from California to NC. But dissolving it and forming a new one in NC is not how you do that. Dissolving it terminates the existing LLC. Instead, you can form a shell LLC in NC and then merge the CA LLC into it with the NC LLC surviving. Consult a business attorney in NC familiar with business entity mergers from one state to another for advice on how to properly do that. These transactions are done all the time. I’ve participated in a number of them myself. Note that if you do the merger properly then there will be no federal tax consequences as a result of the merger; it will be regarded as the same entity it was before and the EIN would stay the same even if you have more than one member.