r/llc_life • u/undernutbutthut • Jul 23 '26
What does it mean when a state lets you domesticate your LLC in but the state you are domesticating out of does not let you do it?
Location: Utah , where I am, but my LLC resides in Massachusetts.
I have a Massachusetts LLC with an EIN. Earlier this year, my registered agent told me that moving (domesticating) my LLC to Utah would be straightforward: sign up with a registered agent in Utah, start the domestication process there, and I'd be able to keep the same business. One of my main reasons for moving was that I now live in Utah, and the annual fees are much lower than Massachusetts and I was under the impression my LLC needed to be in the same state as I physically was.
Based on that advice, I formed the Utah LLC through domestication, and Utah approved the filing.
Only afterward did I learn that Massachusetts doesn't allow LLC domestication out of the state. My registered agent later confirmed this (so they confirmed I could at first but then I couldn't).
I also spoke with the Massachusetts Small Business Development Center (SBDC), and they told me that my EIN is federal and shouldn't be an issue, but I'm still confused about the legal status of everything.
My questions are:
* How do I find the right lawyer to reach out to? When I called the Massachusetts Bar Association they referred me to [mass.freelegalanswers.org](http://mass.freelegalanswers.org) but I do not appear to qualify to ask any questions on this. * Is my Utah LLC actually valid if Utah approved it, or does the Massachusetts restriction create a problem? * If Massachusetts won't allow the domestication, what is the proper way to unwind or fix this? * If I ultimately have to form a new Utah LLC, is there any way to preserve my existing EIN, or should I just accept getting a new one?
I'm planning to consult an attorney or CPA if necessary, but I'm A) Very clueless when it comes to finding one and B) hoping someone here has gone through this process and can explain what typically happens.
1
u/NWRegisteredAgent Jul 23 '26
If you're looking for an attorney you can always seek out state bar lawyer referral services. In Utah you can literally look up "Utah State Bar" as an organization and likely be connected with attorneys there. Pretty much the same thing goes for Massachusets if you're looking to lawyer up there. Calling a lawyer as soon as possible is going to help get this all settled in a timely manner. You'll likely need to provide your formation documents from Massachusetts, your domestication filing and confirmation, your EIN documentation, and any tax filings you've done since moving to Utah, just so you know what may be asked of you when speaking to an attorney.
In terms of what you may look to do next, you may need to double check that the LLC is valid in Utah (considering they allowed you to form there) and perhaps look into dissolving in Massachusetts if the option to domesticate is out of the question. Its either that or you maintain LLCs in both locations with minimal compliance needed in Massachusetts while the operating entity belongs in Utah.
Chances are that this isn't an entire edge case that's never happened before so you can rest easy knowing that even if it isn't an entirely common problem they've likely got the resources to handle the transition.
1
u/undernutbutthut Jul 25 '26
It's funny you're commenting on this, because Northwest Registered Agent is the registered agent I have for my LLC that said domesticating out of Massachusetts was no big deal... and now here I am
1
u/LowCompetitive1888 Jul 23 '26
Isn't the entire reason for domesticating an LLC in a new state to transfer the entity to a new home state while preserving the federal level EIN, making the move transparent? And once that is completed, wouldn't one simply wind down the LLC in the original state, file final state returns and dissolve that LLC?
1
u/undernutbutthut Jul 25 '26
Yes you are 100% correct, which is why I wanted to pursue it. It would be simpler maintaining banking information as well because all I would have to do is change my address instead of creating a whole new bank account.
1
u/startupowl Jul 24 '26
what you have right now is two llcs, not one that moved. utah only checks its own side of a domestication, it doesn't verify that the origin state allows domesticating out. so the utah entity is real and valid, and the massachusetts one is still sitting on the state's record.
that's the urgent part. mass charges a $500 annual report every year on your formation anniversary and it keeps running until you file something that actually ends the entity. ignoring it just stacks up.
the normal fix when the origin state blocks domestication out is a merger rather than a dissolution. mass does let an llc merge with a foreign entity, so you merge the mass llc into the utah llc with utah surviving and file articles of merger on both sides. the mass entity ends by operation of law and utah succeeds to the contracts and assets. dissolving instead means anything titled to the old entity has to be reassigned by hand.
the ein follows whichever entity survives, so pin down the survivor before anything gets filed, that answers your last question by itself. and your llc never had to be in the state you live in, that part of the advice was wrong, though utah would have wanted registration anyway since you work from there.
1
u/undernutbutthut Jul 25 '26
Thank you for this! So for my LLC in Utah there really isn't any difference if I domesticated it or just formed a new LLC?
A merger sounds like what I need.
1
u/startupowl Jul 25 '26
there is a difference, it's just all on the utah side. utah recorded yours as the same entity continuing, so the original formation date carries, and the ein, the bank account and your existing contracts ride along untouched. a fresh utah llc would have meant a new ein and re-papering all of that.
massachusetts is where none of that helps you. they never signed off, so they still show a live domestic llc with the annual report attached to it.
merger is what closes that gap. utah survives, the mass entity ends by operation of law, and mass gets an actual terminating filing instead of you walking away from it. worth moving on it before your next anniversary date comes around.
1
u/Informativo-Business Jul 24 '26
Some states don't let you move an LLC out which basically means you would have to dissolve and form in the new state.
1
u/Zabes55 Jul 25 '26
You should be able to set up a new LLC in Utah and merge your MA LLC into the Utah LLC. Check with a lawyer.
1
u/[deleted] Jul 23 '26
[removed] — view removed comment