Moving your business or office from one state to another is not something to be taken lightly. The only time this is relatively easy is when you run a sole proprietorship. If you have any other company, state to state relocation is much harder, and there is a lot you need to consider. Luckily, there are some tips you can use that help you make the right decision regarding the move.
4 Tips For Moving Businesses To Another State
Know Your Options
The first tip towards state to state relocation for office is to know what your options are. If you have a corporation or an LLC, there are three options available for the move. With a sole proprietorship, you only have one option, which is much more comfortable.
This one option is to move your business and register in the new state. The registration will be the same as registering your business in your original state. There are generally no other steps to be taken.
With corporations and LLCs, the first option is to register as a foreign corporation in your new state while continuing the business in the original state. The second option is to dissolve the original corporation and open a new one in the new state. The last option is to reorganize the company and merge the old corporation with a new one in the new state.
Each option has its pros and cons that you will need to weigh. It is recommended that you speak with a professional who can help you with this. Many attorneys help, while an accountant can outline the financial costs of each option.
Calculate The Costs
When thinking about moving business from one state to another, you have to consider and calculate the costs. While this is the first thing businesses consider, it can also be one of the hardest to determine. There are many hidden and secondary costs of moving to another state that you might overlook.
The obvious cost of the move will be the cost of physically moving everything the business requires. This involved hiring a commercial moving company. You should not hire a residential company because they will not have the right equipment or knowledge to move your business.
Looking at the hidden costs is much harder because they can vary depending on the company. One of these hidden costs is the cost of relocating staff. If you are offering the relocation expense, you have to calculate the amount you are willing to cover and whether your business can afford this.
Know Your Options
The first tip towards state to state relocation for office is to know what your options are. If you have a corporation or an LLC, there are three options available for the move. With a sole proprietorship, you only have one option, which is much more comfortable.
This one option is to move your business and register in the new state. The registration will be the same as registering your business in your original state. There are generally no other steps to be taken.
With corporations and LLCs, the first option is to register as a foreign corporation in your new state while continuing the business in the original state. The second option is to dissolve the original corporation and open a new one in the new state. The last option is to reorganize the company and merge the old corporation with a new one in the new state.
Each option has its pros and cons that you will need to weigh. It is recommended that you speak with a professional who can help you with this. Many attorneys help, while an accountant can outline the financial costs of each option.
Calculate The Costs
When thinking about moving business from one state to another, you have to consider and calculate the costs. While this is the first thing businesses consider, it can also be one of the hardest to determine. There are many hidden and secondary costs of moving to another state that you might overlook.
The obvious cost of the move will be the cost of physically moving everything the business requires. This involved hiring a commercial moving company. You should not hire a residential company because they will not have the right equipment or knowledge to move your business.
Looking at the hidden costs is much harder because they can vary depending on the company. One of these hidden costs is the cost of relocating staff. If you are offering the relocation expense, you have to calculate the amount you are willing to cover and whether your business can afford this.
It would help if you also considered the salary you offer based on where you are moving. If your business is moving to New York from Kansas City, you need to increase salaries because New York is more expensive to live in.
It can also be hard to calculate costs involving workplace safety and employee experience, but they must be considered in your budget.
The Taxes
When you move your business to another state, you need to understand the tax implication of this. The profitability of your company can be severely impacted by the tax situation in your new state. Of course, this will depend on the state that you are moving from and to.
Some companies can get tax credits when they have offices in different locations. If your business is also located in multiple locations, you should consider leaving your company in the original state and working as a foreign corporation. To fully understand the tax implications of your move, you need to talk to your accountant and a tax consultant.
Consider The Growth Capabilities
Before you move your business to a new state, you have to consider how this will impact your growth in the short and long-term. If your business is expanding rapidly and you expect your employee numbers to double in the next few years, you have to be careful with where you move. The state you move to needs to have the talent pool needed to support the growth of your company.
There is no point in moving your company to a new state if you will not have access to qualified employees. You also need to ensure you have access to other professionals who boost your business, such as lawyers and accountants, when moving a company a significant distance.
The Taxes
When you move your business to another state, you need to understand the tax implication of this. The profitability of your company can be severely impacted by the tax situation in your new state. Of course, this will depend on the state that you are moving from and to.
Some companies can get tax credits when they have offices in different locations. If your business is also located in multiple locations, you should consider leaving your company in the original state and working as a foreign corporation. To fully understand the tax implications of your move, you need to talk to your accountant and a tax consultant.
Consider The Growth Capabilities
Before you move your business to a new state, you have to consider how this will impact your growth in the short and long-term. If your business is expanding rapidly and you expect your employee numbers to double in the next few years, you have to be careful with where you move. The state you move to needs to have the talent pool needed to support the growth of your company.
There is no point in moving your company to a new state if you will not have access to qualified employees. You also need to ensure you have access to other professionals who boost your business, such as lawyers and accountants, when moving a company a significant distance.
Move Masterfully
Moving your company to a new state is not something you should take lightly. There are a number of legal implications as well as tax considerations. The expansion of your business and the overall profitability will be impacted as well.
Moving your company to a new state is not something you should take lightly. There are a number of legal implications as well as tax considerations. The expansion of your business and the overall profitability will be impacted as well.
