How to Move an LLC to New Jersey

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

What is New Jersey LLC Domestication?

New Jersey domestication is a legal process that allows an out-of-state LLC to officially transfer to New Jersey.¹ New Jersey’s domestication process also lets a current New Jersey LLC transfer to a new state.²

A company that completes a domestication changes its legal home state—called its state of formation or its domicile. The LLC is still the same company, but it is governed by the new state’s law.³ An out-of-state LLC that domesticates into New Jersey becomes a New Jersey LLC governed by the New Jersey Revised Uniform Limited Liability Company Act.⁴

New Jersey LLC Domestication vs. Conversion

New Jersey’s LLC law authorizes a similar procedure—called a conversion—that changes a different type of entity into an LLC or changes an LLC into a different type of entity.⁵ For example, a New Jersey corporation can convert into an LLC, or a New Jersey LLC can convert into a corporation.

The principal difference between a New Jersey conversion and a New Jersey domestication is that an LLC that completes a domestication is still an LLC. An LLC that completes a conversion under New Jersey law becomes a corporation, limited partnership, or another type of business entity.

Business laws in some states combine conversion and domestication into a single conversion procedure. The conversion process in those states can transfer an LLC to a new state, change a business entity into a different type of entity, or sometimes both. New Jersey uses two distinct procedures for these two goals. This article’s focus is New Jersey LLC domestications that turn out-of-state LLCs into New Jersey LLCs.

Why Transfer an LLC to New Jersey?

The New Jersey domestication process is the most efficient method to change an out-of-state LLC’s legal domicile to New Jersey. A business owner who moves to a new state often wants to bring along the business for simple convenience, but there are multiple other reasons why an owner may want to transfer an LLC into a new state.

• Reduced reporting. When an LLC mostly does business in one state but is domiciled in a different state, the company typically must file annual reports in both states. An LLC that is domiciled in another state and does most of its business in New Jersey may ease its reporting obligations by domesticating into New Jersey. This is because the business may avoid future annual reports in the original state if it will no longer do business there. New Jersey’s $70.00 annual report fee is lower than in many states, so there may be notable cost savings if the original state charges more.
• Convenience. A newly arrived New Jersey resident who owns a business domiciled in another state may find that having New Jersey law govern the company is more convenient. An owner can potentially avoid confusion and reduce legal issues by limiting the states whose laws the owner needs to deal with. An owner of a business that is domiciled in the same state as the owner may also have an easier time working with state government offices.
• Easier professional hiring. A New Jersey domestication may help the owner to more easily identify professionals to assist the business. An LLC owner who lives in New Jersey will have ample selection of local professionals who are familiar with New Jersey law. Hiring an experienced lawyer or accountant in New Jersey who knows another state’s legal or tax system may require more effort. An owner who works with professionals who live nearby may also benefit from networking opportunities and more convenient in-person meetings.
• Legal or regulatory benefits. New Jersey does not typically make it onto lists of the best states for businesses, but a domestication into New Jersey may still make sense if a particular aspect of New Jersey law is good for the company. For example, an LLC may want to branch out into a business that its current state does not permit for LLCs.⁶ Or, the LLC’s members may want to adopt operating agreement terms allowed in New Jersey but not in the current state, or to take advantage of New Jersey’s rules for the LLC’s specific industry.
• Tax savings. New Jersey sometimes ranks as the state with the highest taxes for business. However, a New Jersey domestication may nonetheless result in tax savings if it reduces the number of states that tax the company. A state’s power to tax an LLC requires a sufficient connection—or taxable nexus—between the business and the state. An LLC that completes a New Jersey domestication may avoid taxation by the original state if the transfer ends the taxable nexus.

What are the Benefits of New Jersey LLC Domestication?

The New Jersey domestication process is a streamlined and cost-effective way to move an out-of-state LLC to New Jersey. There are other methods of moving an existing business, but domestication has multiple key advantages over the alternatives:

• The LLC keeps the same identity. An out-of-state LLC that domesticates into New Jersey is still the same company after completing the process.⁷ It continues its history as a taxpayer and can keep using the same Employer Identification Number (EIN). The consistent identity avoids administrative hassle and confusion with government offices.
• The business’s day-to-day operations are not interrupted. An LLC that domesticates into New Jersey can keep doing business as normal during and after the process. There is no need to temporarily close office locations, and the business’s employees are still employed by the same company.
• The LLC can continue using its bank accounts. A domesticated LLC owns all the same property that the company owned before the domestication.⁸ The business’s banks accounts stay open, so there is no need to close and re-open accounts during a domestication.
• Business contracts are still effective. Existing business agreements are not affected by an LLC domestication. The LLC can continue its business relationships, and contracts are still valid and enforceable. The LLC after a domestication still has the same contractual rights and obligations that the out-of-state LLC had before the domestication.⁹
• Dissolution and registration as a foreign LLC are unnecessary. A New Jersey domestication is not a dissolution of the LLC in the original state, and there is no need to distribute assets or wind up affairs.¹⁰ Avoiding dissolution—a costly, time-intensive process that some business-transfer methods require—is a significant advantage of LLC domestication. Registration as a foreign LLC in the original state is also unnecessary unless the business intends to keep doing business there.

What LLCs can Convert to New Jersey LLCs?

An LLC that conducts a New Jersey domestication needs to comply with the laws of both states—the original state and New Jersey.¹¹ Domestication into New Jersey is only possible if the current state has a statutory process that transfers an LLC to a new state. The original state may use the name domestication or conversion—as long as there is a legal procedure to change an LLC’s domicile. If not, the LLC cannot domesticate into New Jersey.

An LLC considering a New Jersey domestication should also verify that its business is lawful for a New Jersey LLC. Some states prohibit LLCs from engaging in certain businesses—such as banking or insurance. A New Jersey LLC can have “any lawful purpose,” but the company needs to be sure to follow all laws and regulations that apply specifically to the business.¹² An out-of-state LLC whose business is unlawful in New Jersey should not domesticate into New Jersey.

Some states do not let LLCs provide professional services—which are services that a person must have a license to offer to the public. Other states authorize a specific type of LLC—called a professional limited liability company (PLLC)—that is formed specifically to offer professional services. New Jersey uses neither approach. A New Jersey LLC can provide professional services as long as the company follows all licensing and regulatory requirements that apply to the profession. Before starting a domestication, an out-of-state LLC that will provide professional services in New Jersey should verify that all members, employees, or other agents who will offer the service hold the right New Jersey licenses and can comply with all applicable regulations.

How Much Does New Jersey LLC Domestication Cost?

The New Jersey LLC domestication process requires service-provider labor costs, filing fees, and registered agent fees (if hired).

Service Provider Labor Costs

A domesticating LLC that hires a service provider to manage the domestication into New Jersey will need to compensate the provider for the work that goes into the project. Amounts vary between providers and may be assessed as a flat fee or hourly rate.

A service provider’s work for an LLC domestication typically includes information gathering and planning, drafting domestication documents, communications with LLC owners and state-agencies, and document filing. Total labor costs for a domestication may depend on the scope of the service provider’s assistance.

Filing Fees

State agencies in both states charge filing fees for the domestication documents. The New Jersey Division of Revenue and Enterprise Services (DORES) charges $225.00 for an LLC domestication into New Jersey. The amount includes a $100.00 filing fee for the Articles of Domestication and a $125.00 filing fee for the LLC’s New Jersey Certificate of Formation.¹³

The state where the LLC is currently organized will also charge a filing fee for documents the state requires LLCs to file when domesticating out of the state. The filing fee in the original state varies between states.

Registered Agent Fees

A New Jersey LLC must designate and maintain an office and registered agent located in New Jersey.¹⁴ A domesticating LLC identifies the information in its domestication documents.

A New Jersey LLC’s registered agent has legal authority to accept service of legal process and official notices and communications for the company.¹⁵ An LLC’s registered agent must be an individual who lives in New Jersey or a business entity that has legal authority to do business in New Jersey.¹⁶

New Jersey LLCs often choose to hire commercial registered agents to fill the registered agent role. A commercial agent charges an annual fee—typically around $100.00—for serving as a business’s registered agent. Using a commercial registered agent promotes privacy and helps keep important communications organized and consistent.

How Long Does New Jersey LLC Domestication Take?

The timeframe to domesticate an out-of-state LLC into New Jersey is based largely on how long each person involved in the process takes to complete each step. Factors that affect the total length of time for a domestication include:

• The business owners’ time to plan the domestication and provide information to the document preparer;
• The turnaround time for the service provider or other document preparer to draft the domestication documents;
• The owners’ turnaround time to review and sign domestication documents or request changes;
• The service provider’s or other responsible person’s time to file domestication documents with state agencies; and
• The turnaround time for state agencies to review and process the domestication documents.

Filing offices’ processing time can vary substantially between states and transactions. A New Jersey filer can request expedited processing by paying an extra fee to the Division of Revenue and Enterprise Services.¹⁷ Options include 24-hour processing for $25.00, same-day processing for $50.00, 2-hour processing for $500.00, and 1-hour processing for $1,000.00.

What Laws Govern New Jersey LLC Domestication?

New Jersey law and the original state’s law both govern the process for domesticating an out-of-state LLC into New Jersey.¹⁸ New Jersey’s laws that address LLC domestications are described throughout this article and can be found at N.J. Stat. Ann. §§ 42:2C-82, et. seq.

The LLC’s current state’s law controls the following issues:

• Can the LLC domesticate into New Jersey? An out-of-state LLC can domesticate into New Jersey only if its current state has a statutory procedure for transferring an LLC to a new domicile state.¹⁹
• How do the members or managers approve the plan of domestication? The company must approve the plan of domestication under the approval standard that the current state’s law describes.²⁰
• What domestication documents are filed in the current state? The current state’s filing requirements for LLCs that domesticate out of the state are determined by the current state’s law.
• What additional domestication requirements does the current state have? The current state’s law determines what (if any) additional requirements are needed for domesticating LLCs.

In some cases, both states’ laws will set requirements for the same aspect of the domestication process. When that occurs, the LLC must satisfy every element that either state requires. For example, New Jersey has a list of items that a plan of domestication must contain, and the LLC’s current state often has a similar list.²¹ Any items found in either state’s list must be in the plan of domestication—even if the other state’s list does not include it.

What is the New Jersey LLC Domestication Process?

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

Document Preparation

A New Jersey LLC domestication requires careful preparation of several domestication documents describing the terms of the transfer into New Jersey. The LLC must ensure that the documents meet both states’ requirements.

• Plan of Domestication. A Plan of Domestication that is designed to comply with the requirements of both New Jersey law and the law of the state that the LLC is moving from.
• New Jersey Articles of Domestication. The New Jersey Articles of Domestication with all information and any related documents needed for filing with the Division of Revenue and Enterprise Services (DORES) of the New Jersey Department of the Treasury.
• 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.²²
• New Jersey Certificate of Formation. The New Jersey Certificate of Formation for filing with the Division of Revenue and Enterprise Services (DORES) of the New Jersey Department of the Treasury.
• New Jersey Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as a New Jersey 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 New Jersey organizational documents as the LLC’s governing documents.

Administrative Tasks

An out-of-state LLC transferring to New Jersey must perform several administrative tasks to complete the domestication process. The LLC officially becomes a New Jersey LLC once all tasks are completed and filed documents are accepted by state agencies.

• Conduct preliminary name search. Check the official records of the Division of Revenue and Enterprise Services (DORES) of the New Jersey Department of the Treasury to determine whether the LLC’s name is available in New Jersey. (If the name is unavailable, a slight name change may be required to complete the domestication.)
• Obtain signatures on the Articles of Domestication. The Articles of Domestication must be signed by the required parties. The Division of Revenue and Enterprise Services requires a manual (wet) signature on the Articles of Domestication (no e-signing).
• Obtain signatures on the Certificate of Formation. The Certificate of Formation must be signed by the required parties. The Division of Revenue and Enterprise Services (DORES) allows the Certificate of Formation to be e-signed.
• File the Articles of Domestication. File the Articles of Domestication with the Department of the Treasury of the Secretary of State. The Division of Revenue and Enterprise Services (DORES) of the New Jersey Department of the Treasury allows the Articles of Domestication to be e-filed through the central forms repository service.
• File the Certificate of Formation. File the Certificate of Formation with the Division of Revenue and Enterprise Services (DORES) of the New Jersey Department of the Treasury. The Division of Revenue and Enterprise Services allows the Certificate of Formation to be e-filed.
• 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 New Jersey LLC Domestication?

A New Jersey domestication lets an LLC transfer from another state to New Jersey with no significant disruption to the company’s ordinary business. A New Jersey domestication is operative when the LLC’s new certificate of formation takes effect—at which point the legal effects of domestication kick in as described below.²³

• Company existence. The New Jersey LLC after domestication is for all purposes the same company as the out-of-state LLC from before domestication.²⁴ It continues its existence as a New Jersey LLC and can keep using the same EIN and other identifying information.
• Governance. The LLC after domestication is domiciled in New Jersey, and the New Jersey Revised Uniform Limited Liability Company Act primarily governs the company.²⁵ The LLC’s New Jersey certificate of formation and operating agreement take effect and govern the company’s affairs after domestication.
• LLC property. The New Jersey LLC owns all property that the out-of-state LLC owned before domesticating into New Jersey. The company holds all the same property rights, title, and interests that the out-of-state LLC held.²⁶ There is no need to sign deeds in favor of the New Jersey LLC or to formally transfer assets.
• LLC obligations. The New Jersey LLC still owes all debts and taxes and has the same legal obligations and liabilities that the out-of-state LLC had before domestication.²⁷
• Legal matters. Legal cases and proceedings involving the out-of-state LLC can carry on as though there were no domestication.²⁸ The New Jersey LLC’s name substitutes for the former name if the domestication terms involved a name change.
• Contracts. The LLC’s business contracts remain valid and enforceable after the domestication into New Jersey. All of the company’s contractual rights, obligations, and powers stay with the New Jersey LLC.²⁹
• Ownership interests. When the domestication takes effect, the terms and conditions stated in the plan of domestication become effective—except to the extent the plan of domestication provides differently.³⁰ The required terms include the manner and basis for converting interests in the out-of-state LLC into interests in the New Jersey LLC, money, or other consideration.³¹ Members often agree to convert interests in the out-of-state LLC into interests in the New Jersey LLC in the same proportions.
• No dissolution. A domestication does not dissolve the LLC in the original state, and there is no need to dissolve the company after completing the domestication unless the members agree otherwise.³²

1. N.J. Stat. Ann. § 42:2C-82(a).
2. N.J. Stat. Ann. § 42:2C-82(b).
3. N.J. Stat. Ann. § 42:2C-85(a)(1).
4. N.J. Stat. Ann. §§ 42:2C-1, et. seq.
5. N.J. Stat. Ann. § 42:2C-78.
6. N.J. Stat. Ann. § 42:2C-4(b).
7. N.J. Stat. Ann. § 42:2C-85(a)(1).
8. N.J. Stat. Ann. § 42:2C-85(a)(2).
9. N.J. Stat. Ann. § 42:2C-85(a)(5).
10. N.J. Stat. Ann. § 42:2C-85(a)(7).
11. N.J. Stat. Ann. § 42:2C-82(b).
12. N.J. Stat. Ann. § 42:2C-4(b).
13. N.J. Stat. Ann. § 42:2C-93.
14. N.J. Stat. Ann. § 42:2C-14(a).
15. N.J. Stat. Ann. § 42:2C-17(a).
16. N.J. Stat. Ann. § 42:2C-14(c).
17. N.J. Stat. Ann. § 42:2C-93(b).
18. N.J. Stat. Ann. § 42:2C-82(a).
19. N.J. Stat. Ann. § 42:2C-82(a).
20. N.J. Stat. Ann. § 42:2C-83(a)(2).
21. N.J. Stat. Ann. § 42:2C-82(c).
22. 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).
23. N.J. Stat. Ann. § 42:2C-84(b).
24. N.J. Stat. Ann. § 42:2C-85(a)(1).
25. N.J. Stat. Ann. § 42:2C-82(a).
26. N.J. Stat. Ann. § 42:2C-85(a)(2).
27. N.J. Stat. Ann. § 42:2C-85(a)(3).
28. N.J. Stat. Ann. § 42:2C-85(a)(4).
29. N.J. Stat. Ann. § 42:2C-85(a)(5).
30. N.J. Stat. Ann. § 42:2C-85(a)(6).
31. N.J. Stat. Ann. § 42:2C-82(c).
32. N.J. Stat. Ann. § 42:2C-85(a)(7).