Moving Corp. From One State To Another

[geekgirldany]

I have two customers that want to move their corporations from other states to Georgia. One I thought he had actually already done it. He told me he had. I just found out he did not.

How complicated is this? Should I tell them to go to a lawyer? I've never done this before. The only thing I know would be to send in articles of dissolution(is that correct) to the other state and then they can incorporate like always in Georgia.

Not sure if I should do this or not.

[ChEAr$]

incorporating

I have two customers that want to move their corporations from other states to Georgia. One I thought he had actually already done it. He told me he had. I just found out he did not.

How complicated is this? Should I tell them to go to a lawyer? I've never done this before. The only thing I know would be to send in articles of dissolution(is that correct) to the other state and then they can incorporate like always in Georgia.

Not sure if I should do this or not.

First of all, has the business itself physically moved to Georgia? Was it headquarterd
in another state already? If so, and if also doing business in Georgia at same time, it
should have already registered as a foreign corporation in Atlanta and appropriate state
tax returns filed with both states.

Only experience i've had with this was some time ago. My client corporation was a
Texas corporation engaged in construction work in Georgia, but until I took him on, had
never registered with either Georgia OR Alabama, where he was based. At the time,
since all activity was in Georgia, I "recommended" to him to incorporate in Georgia,
and he did that. Only after this occured did we dissolve the Texas corporation.

Later on, when he also worked in Alabama, where he really was based (out of his
home), he then incorporated in Alabama and we dissolved the Georgia corporation.
From then on of course he filed the Alabama form 20S plus the Georgia 500S, with
correct inter state allocations of income using the three factor formula.

As for doing it for him, beware, for some on this board will vehemently accuse you of
wanting to practice law! However any Georgia resident can "do it himself", with forms
downloaded from Secretary of State's website, at really nominal costs. Of course your
typing services will have to be billed, but only for secretarial services. Got it?

Only after client is safely incorporated in Georgia, is it then proper to dissolve in other
state. However, if still also operating in that other state, he then needs to register the
new Georgia corporation as a foreign corporation in that state.

And you can then have as much fun as I did, using the three factor formula!

[geekgirldany]

Thanks so much Harlan. One is doing all the work in Georgia. The other one would be more complicated. Two shareholder S-Corp incorporated in Alabama. They do the work in Alabama, Georgia, and South Carolina. One shareholder just moved from Alabama to Georgia. The other one that I am dealing with already lived in Georgia. In 2008 the work is done in South Carolina but they live in Georgia.

So I need to find out all the states they will be working in.

Have them incorporate with Georgia. I think this fellow is smart enough to do it himself.

Then they need to dissolve Alabama corp. (which I've never helped out on)

[Nashville]

Not necessary

Keep in mind that it is not absolutely necessary to change the original state of incorporation. In fact, thousands of corporations are originally registered in Delaware, and don't even have a location in that state. A corporation can be registered in any state, and still do business in Georgia.

This should help you to put the onus on the client. Tell him(her) to see a lawyer to get it changed, and until such time as this happens you are still obligated to file as a corporation domiciled in the original state and file Georgia as a foreign corporation.

Let's say this corporation was created in Arkansas, and as you say, does business in Georgia, Alabama, and South Carolina. It must file not only in GA, AL, and SC, but also in AR even though there is no business operation in Arkansas anymore. When the client gets tired of this extra unnecessary tax prep and AR taxes, he can take the initiative to see a lawyer and "get 'r done." Or he may have legal reasons to keep it in AR for all we know.

If this is an "S" corporation, each shareholder will have to file in every state, resident or not, unless the corporation makes a "composite payment" to these states to relieve them of the responsibility. This may not be true if one's own state does not honor S corp status. (TN is one which does not). This area is a whole 'nother discussion, and probably should not go any further.

Allocation of income and equity amongst the various states depends on various formulas, unique to each state. Each state will have a K-1 for every shareholder (resident or not), but only the income attributable to that state is reported under the Multistate Tax Compact. (This breaks from the usual practice of individuals reporting ALL income and then taking a credit for taxes paid to other states)

Might be more than you cared to know, but all the above information is involved in your situation.

[geekgirldany]

No thank you for the information. Printing this topic out to have for the future when this comes up.

[les grans]

How do the assets and liabilities of the "old" corporation get into the "new" corporation after the incorporation in another state? Or are the two corporations really the same one, just with a new state of incorporation?

[ChEAr$]

The corporation itself

continues in place, with appropriate entries in the minutes of the stockholders' special meeting. The accounting books remain open with perhaps an entry to reflect any new
stock issued or bought back as treasury stock.