How to Move an LLC to Kansas

There are many reasons why a business owner may want to move an LLC to Kansas. This article discusses the use of domestication, known in some states as LLC conversion, to transfer an LLC to Kansas.

What is Kansas LLC Domestication?

Kansas LLC domestication is a legal process for moving an out-of-state LLC to Kansas.¹ When an LLC completes a domestication to Kansas, it is no longer organized under its original state’s law and instead is governed by the Kansas Revised Limited Liability Company Act.² The LLC is still the same entity, but its legal home state—called its state of formation or its domicile—is now Kansas.³

Kansas LLC Domestication vs. Kansas LLC Conversion

In some states, the legal procedure that changes an LLC’s domicile is called a conversion. The conversion process in those states can usually achieve two separate goals:

1. It can transfer an LLC to a new state; or
2. It can change an LLC into a different type of entity (such as a corporation or partnership).

Michigan’s conversion process, for example, can convert a Michigan LLC into a corporation or into an LLC organized in a different state.⁴

The Kansas conversion process always changes a business into a different type of entity.⁵ A Kansas conversion may sometimes change a business’s domicile state, too—but only if the business is also becoming a different type of entity.⁶ Thus, a Kansas LLC can convert into a Kansas corporation or into an out-of-state corporation. But a Kansas conversion cannot change an out-of-state LLC into a Kansas LLC (or vice versa). An out-of-state LLC that wants to become a Kansas LLC must use Kansas’ domestication process.

Why Transfer an LLC to Kansas?

An LLC owner may domesticate into Kansas for a particular business purpose. Or, a Kansas LLC domestication may just be a matter of convenience for the owner. Any of the following reasons could warrant a domestication into Kansas.

• Member or manager convenience. When business owners move to a new state, they often want to move their businesses, too. If an LLC owner moves to Kansas, legal compliance may be simpler if the LLC is governed by Kansas law—especially if the business’s principal office is also in Kansas. Focusing on one state may also make interactions with government agencies more convenient.
• Legal advantages. A Kansas LLC domestication may be a wise business decision if Kansas law is a better fit for the company. An LLC could benefit from a transfer to Kansas, for example, if Kansas law allows a more flexible management structure or provides a more predictable legal environment in the LLC’s industry.
• Professional hiring. An LLC owner who hires an attorney, accountant, or other professional usually needs someone familiar with the LLC’s domicile state’s law. An owner who lives in Kansas can more easily find local professionals with expertise in Kansas law. On the other hand, a Kansas-based owner will have more difficultly finding someone local who is familiar with (for example) California law.
• Tax savings. There are often significant differences in tax rates between states. An LLC that moves to Kansas may save on taxes if it is coming from a state with higher business tax rates—such as Minnesota or California. Owners may also save on personal taxes if they relocate to Kansas from a state—like Iowa or Minnesota—with higher individual income tax rates. A Kansas LLC domestication can also reduce an LLC’s tax burden if the company is no longer taxed by multiple states. A state can tax a business only if the business and the state have enough of a connection—or taxable nexus. An out-of-state LLC that domesticates into Kansas may pay less taxes overall if the transfer ends the taxable nexus with the original state.
• Reduced paperwork and reporting costs. An LLC that is domiciled in another state—but that does most of its business in Kansas—must meet both states’ annual reporting requirements. The business may avoid future filings in its original state if it domesticates to Kansas. Thus, a Kansas domestication may reduce an LLC’s annual reporting obligations. Kansas requires a $50.00 annual fee and an annual report that can be filed online.

What are the Benefits of Kansas LLC Domestication?

Kansas’ LLC domestication procedure is the best option for most out-of-state LLCs that want to move to Kansas. Domestication is a relatively streamlined and inexpensive process, and it has multiple other features that make it less burdensome than alternative ways of moving a business.

• The business keeps the same identity. An out-of-state LLC that domesticates to Kansas is the same entity throughout the process, and there is no interruption in its existence.⁷ The company keeps the same Employer Identification Number (EIN) and continues its administrative history. The continuity reduces the risk of confusion and clerical errors at government offices.
• Ordinary operations continue as normal. An LLC domestication does not disturb the business’s day-to-day operations. Office locations can stay open, and there is no need to interrupt the business’s revenue-generating activities.
• The business keeps its assets and bank accounts. The Kansas LLC still owns all the same assets after the domestication.⁸ Because the same entity owns the property, there is no need to transfer assets between entities or to prepare deeds or assignments. The LLC can also keep open and continue using its same bank accounts. Members or managers may choose to open new accounts for the business—for example, to switch to a Kansas bank. But changing bank accounts is unnecessary.
• Business contracts are still valid and enforceable. A Kansas domestication does not interfere with the LLC’s business contracts. The Kansas LLC after domestication is still a party to agreements that involved the out-of-state LLC before domestication. All the company’s contractual rights, duties, and obligations stay with the Kansas LLC during and after the process.⁹
• Domestication does not disrupt employment relationships. The business’s employees are still employed by the same company throughout the domestication process. There is no need to end employment relationships and re-hire employees.
• Dissolution is unnecessary. Domestication simply transfers the existing out-of-state LLC to Kansas. Dissolution in the original state is unnecessary, and there is no break or pause in the company’s existence.¹⁰
• Foreign LLC registration is unnecessary. The Kansas LLC need not register as an out-of-state (or foreign) LLC in the original state—unless the company plans to do further business there. If the out-of-state LLC was qualified to do business in Kansas as a foreign LLC, its Kansas certificate of authority is automatically cancelled when the domestication takes effect.¹¹ Registration as a foreign LLC in Kansas is no longer needed because the company is now a Kansas LLC.

What LLCs Can Convert to Kansas LLCs?

Not all out-of-state LLCs can use the domestication process to move to Kansas. An LLC currently organized in another state can only domesticate to Kansas if the current state authorizes LLC domestications.¹² The current state may use the name conversion instead of domestication. But if the state has no legal procedure to change an LLC’s domicile, the out-of-state LLC is not eligible for a Kansas LLC domestication.

An out-of-state LLC also needs to be sure that Kansas allows LLCs to do the type of business the company does. Kansas generally authorizes LLCs to engage in any lawful business—except that Kansas LLCs cannot issue insurance policies, assume insurance risks, or operate as banks.¹³ An out-of-state LLC involved in insurance or banking should not domesticate to Kansas.

Specialized Kansas LLCs

Kansas recognizes specialized forms of LLCs that are governed by Kansas LLC law and subject to extra legal requirements. An out-of-state LLC that will qualify as a special form of LLC under Kansas law must ensure that it meets all legal requirements before beginning a domestication.

A Kansas professional limited liability company (or PLLC) is an LLC formed for the purpose of providing a professional service. A professional service is a service that a person can offer in Kansas only with the necessary license, registration, or certification issued by a Kansas licensing body.¹⁴ A Kansas PLLC must identify the professional service it provides in its articles of organization. And it must also file a certificate issued by the licensing office that states that the members have the necessary licenses and that the office has approved the PLLC’s proposed name.¹⁵

Before starting a domestication, an out-of-state LLC that will offer a professional service in Kansas needs to confirm that its members and employees have the required licenses and that the company can abide by the Kansas licensing authority’s rules and regulations.

Another specialized form of Kansas LLC is called a public benefit LLC (or PBLLC). A Kansas PBLLC must be formed to produce a positive effect in one or more specific areas, and it must operate in a responsible and sustainable manner.¹⁶ A domesticating LLC that will act as a Kansas PBLLC must ensure that it can meet all PBLLC requirements. For example, a Kansas PBLLC must produce an annual statement outlining its efforts toward producing its intended public benefit.¹⁷

How Much Does Kansas LLC Domestication Cost?

An LLC planning a domestication to Kansas should expect labor costs charged by service providers, filing fees charged by state agencies, and registered agent fees (if applicable). The exact cost of an LLC domestication varies based on the service provider the LLC uses and the LLC’s current state.

Labor Costs

A service provider that an LLC hires to handle a domestication will charge for the time spent on the domestication. The work associated with managing a domestication includes time spent:

• Communicating with the business owners about the domestication process and documents;
• Reviewing and organizing information needed for domestication documents;
• Drafting domestication documents; and
• Filing domestication documents with state agencies and related communications.

Service providers may offer a flat fee for managing a domestication or may have an hourly rate. The total charged by service providers varies by provider and may depend on the scope of the provider’s involvement in the project.

Filing Fees

The Kansas Secretary of State and the current state’s equivalent office will charge filing fees for the domestication documents. Kansas’ total fee for an LLC domestication into Kansas is $240.00—which is composed of a $165.00 fee for the articles of organization and a $75.00 fee for the certificate of domestication.¹⁸ After completing the domestication, the LLC will need to pay a $50.00 annual report fee by April 15 of each year.

The filing-fee amount that the other state charges depends on the state where the LLC is currently formed. In most states, the filing fee for an LLC domesticating out of the state is less than the fee for an LLC domesticating into the state. Kansas, for example, charges a filing fee of $75.00 for a Kansas LLC domesticating into another state.

Registered Agent

Every Kansas LLC must designate a registered office and a registered agent—both of which are publicly available information kept by the secretary of state.¹⁹ The registered office is a location where the LLC can be served with process and official communications. The registered agent is a person available to accept service and forward it to the LLC.²⁰

An LLC’s registered office must be a street address in Kansas. The registered agent can be the LLC itself, an individual who lives in Kansas, a Kansas business entity, or a foreign business entity with authority to do business in Kansas.²¹ The registered agent must be regularly present at a Kansas address where the agent can accept service for the company.²²

Hiring a Commercial Registered Agent

LLCs often decide to hire a commercial registered agent—which is an individual or entity that serves as a business’s registered agent in exchange for an annual fee. A commercial registered agent helps to keep important communications organized and to avoid disruptions to members, managers, or employees’ work day. A Kansas LLC without a Kansas business address can also hire a commercial registered agent to satisfy the legal requirement that an LLC have a registered office and registered agent physically present in Kansas.

A domesticating LLC that hires a commercial registered agent will incur the agent’s fee—typically between $100.00 and $150.00 per year—as part of the domestication process.

How Long Does Kansas LLC Domestication Take?

The length of the Kansas LLC domestication process varies based on several factors. The total turnaround time depends in large part on how long each party takes to complete each step:

• Members’ or managers’ time to provide information to the service provider or other person responsible for drafting domestication documents;
• The document preparer’s time to prepare the domestication documents;
• Members’ or managers’ time to review draft domestication documents and request revisions or approve and sign the documents;
• The service provider or other responsible person’s time to file completed documents with state offices; and
• The time to process domestication documents needed by the Kansas Secretary of State and current state’s equivalent office.

What Laws Govern Kansas LLC Domestication?

An LLC’s domestication into Kansas must follow both Kansas law and the LLC’s current state’s law. The person responsible for managing the domestication needs to be familiar with both states’ requirements. Although domestication rules are often similar, it is common for one state to have a requirement that the other state does not have. If both states’ domestication laws address an issue, a domesticating LLC must comply with both states.

Kansas’ domestication law specifically says that the LLC’s current state determines how an LLC must approve a domestication.²³ Thus, an out-of-state LLC domesticating to Kansas must approve the domestication under the LLC’s current state’s standard. The current state’s law will also determine:

• Whether domestication to Kansas is possible (the current state must authorize LLC domestications);²⁴
• The requirements for the domestication document(s) that must be filed in the current state; and
• Any additional domestication requirements for LLCs transferring out of the state.

What is the Kansas LLC Domestication Process?

The Kansas LLC domestication process consists of two components: document preparation and administrative tasks.

Document Preparation

An LLC domestication to Kansas involves preparation of several important documents that set forth the terms of the domestication. The document preparer must draft the documents carefully to comply with Kansas law and the current state’s law.

• Plan of Domestication. A Plan of Domestication that is designed to comply with the requirements of both Kansas law and the law of the state that the LLC is moving from. Kansas uses the name Agreement of Domestication for the equivalent document that a Kansas LLC must prepare when domesticating to a new state.
• Kansas Certificate of Domestication to Kansas. The Certificate of Domestication to Kansas with all information and any related documents needed for filing with the Business Filing Center of the Secretary of State.
• Domestication Document for Filing in Prior State. Depending on state law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, statement of conversion, certificate of conversion, or a similar term.²⁵
• Kansas Articles of Organization. The Kansas Articles of Organization for filing with the Secretary of State’s Business Filing Center.
• Kansas Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as a Kansas LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution Authorizing Domestication. A resolution approving the transaction and adopting the Kansas organizational documents as the LLC’s governing documents.

Administrative Tasks

The out-of-state LLC must complete several administrative steps to implement the domestication after final versions of the Kansas domestication documents are ready

• Conduct preliminary name search. Check the official records of the Business Filing Center of the Kansas Secretary of State to determine whether the LLC’s name is available in Kansas. (If the name is unavailable, a slight name change may be required to complete the domestication.)
• Obtain signatures on the Certificate of Domestication to Kansas. The Certificate of Domestication to Kansas must be signed by the required parties. The Secretary of State’s Business Filing Center allows the Certificate of Domestication to Kansas to be e-signed.
• Obtain signatures on the Articles of Organization. The Articles of Organization must be signed by the required parties. The Secretary of State’s Business Filing Center allows the Articles of Organization to be e-signed.
• File the Certificate of Domestication to Kansas. File the Certificate of Domestication to Kansas with the Business Filing Center of the Secretary of State. The Business Filing Center requires the Certificate of Domestication to Kansas to be filed by mail or in person (no e-filing).
• File the Articles of Organization. File the Articles of Organization with the Business Filing Center of the Secretary of State. The Business Filing Center allows the Articles of Organization to be e-filed. However, Articles of Organization filed with a Certificate of Domestication to Kansas are typically submitted as an attachment to the Certificate of Domestication—which is filed by mail or in person.
• File domestication documents with prior state. File the domestication documents with the Secretary of State or equivalent agency for the state that the LLC is moving from.

What is the Legal Effect of Kansas LLC Domestication?

A Kansas LLC that has completed a domestication from another state is still the same company it was before the domestication.²⁶ The difference is that the company is now a Kansas LLC governed by the Kansas Revised Uniform Limited Liability Company.²⁷ The LLC’s new Kansas articles of organization and operating agreement are in effect and bind the company and its members after the domestication.²⁸

The legal effects of a Kansas LLC domestication emphasize that the Kansas LLC is a continuation of the same company’s existence. The legal continuity reduces the process’s administrative hurdles.

• Day-to-day operations. A Kansas LLC domestication does not impact the business’s day-to-day operations. It can stay open, and employees can keep working throughout the process. The out-of-state LLC’s tax history, Employer Identification Number (EIN), and other identifying information now belong to the Kansas LLC.
• Company property and liabilities. The Kansas LLC owns all the same property that the out-of-state LLC owned before domestication. There is no need to transfer assets, and the domestication does not impair the LLC’s property rights.²⁹ The Kansas LLC also owes all of the out-of-state LLC’s debts, taxes, and other liabilities.³⁰
• Legal proceedings. Any pending legal actions or proceedings involving the LLC continue in the name of the Kansas LLC. If the domestication involves a name change, the new name is simply substituted for the out-of-state LLC’s name.³¹
• Membership interests. Owners’ interests in the out-of-state LLC convert under the terms set forth in the LLC’s plan of domestication.³² Interests in the out-of-state LLC typically become interests in the Kansas LLC in the same proportion, but the members can agree to a different treatment.
• No winding up. An out-of-state LLC that domesticates to Kansas does not have to wind up its affairs. The domestication does not cause the LLC to dissolve and is not considered a dissolution.³³ Rights of members, managers, or third parties that take effect if the company dissolves or liquidates are not triggered by the domestication (unless the LLC’s operating agreement or the current state’s law specifically says otherwise).³⁴

1. Kan. Stat. § 17-78-501(b).
2. Kan. Stat. §§ 17-7662, et. seq.
3. Kan. Stat. § 17-78-506(a)(1)(B).
4. MCL § 450.4708(1).
5. Kan. Stat. § 17-78-401(a).
6. Kan. Stat. § 17-78-401(b).
7. Kan. Stat. § 17-78-506(a)(1)(B).
8. Kan. Stat. § 17-78-506(a)(2).
9. Kan. Stat. §§ 17-78-506(a)(2)-(3).
10. Kan. Stat. § 17-78-506(g).
11. Kan. Stat. § 17-78-506(f).
12. Kan. Stat. § 17-78-501(b).
13. Kan. Stat. § 17-7668(a).
14. Kan. Stat. § 17-2707(b).
15. Kan. Stat. § 17-7673.
16. Kan. Stat. § 17-76,149.
17. Kan. Stat. § 17-76,152.
18. Kan. Stat. § 17-76,136(b).
19. Kan. Stat. § 17-7924.
20. Kan. Stat. § 17-7925(b)(3).
21. Kan. Stat. § 17-7925(a).
22. Kan. Stat. § 17-7925(b)(1).
23. Kan. Stat. § 17-78-503(b).
24. Kan. Stat. § 17-78-501(b).
25. Fourteen states use the term articles of domestication to refer to the document that must be filed with the state to approve the domestication: Iowa, Massachusetts, Minnesota, Nebraska, New Hampshire, New Jersey, North Dakota, South Dakota, Utah, Vermont, Virginia, Wisconsin, Wyoming, and Indiana. The corresponding document may be called a statement of domestication (Alaska, Arizona, Connecticut, Idaho, Illinois, Mississippi, and Pennsylvania); articles of conversion (Florida, Nevada, North Carolina, Oregon, and Washington) or certificate of conversion (California, Delaware, Georgia, Michigan, Ohio, and Texas). It may also be called a statement of conversion (Colorado, Maine), certificate of domestication (Kansas), request for conversion (Louisiana), or statement/plan of domestication (District of Columbia).
26. Kan. Stat. § 17-78-506(a)(1)(B).
27. Kan. Stat. § 17-78-506(a)(1)(A).
28. Kan. Stat. § 17-78-506(a)(6) and (8).
29. Kan. Stat. § 17-78-506(a)(2).
30. Kan. Stat. § 17-78-506(a)(3).
31. Kan. Stat. § 17-78-506(a)(5).
32. Kan. Stat. § 17-78-506(a)(9).
33. Kan. Stat. § 17-78-506(g).
34. Kan. Stat. § 17-78-506(b).