Move Your Company To Or From Washington State

Move Your Company To Or From Washington State

Small business owners move all the time, and when they move, they must consider whether to move their company along with them. We’ve touched on the topic of moving a company in our article about moving a company to Oregon. Keeping our focus on the Pacific Northwest, this article explains how to move a company to or from Washington state.

As we noted in our other article (see the above link), business owners typically have three options when moving their company: (1) close down the company and start over in the new state; (2) merge the company into a company in the new state; or (3) convert the company into a company in the new state. As noted in that other article, option (3) is often the best for small business owners, as it tends to be the simplest and most straightforward. 

Knowing that it’s the best, we’ll focus the remainder of this article on option (3) and explain how to convert a company incorporated in another state into a Washington company or, alternatively, convert an existing Washington company into a company in another state.

Convert your company into a Washington company

You can think of the conversion process as transitioning your company from one state to another – sort of like rolling over an IRA from one plan to another when you leave a job. Some, but not all, states allow companies to convert from one state to another. Of the states that do allow for conversions, some allow all types of companies – that is, corporations, limited liability companies (LLCs), limited partnerships (LPs), and limited liability partnerships (LLPs) – to convert in and out, while other states only allow some types of companies to convert in and out.

If you want to convert your company into a Washington company, you’re in luck: Washington allows all of the above types of companies to convert into the state. To convert your company into Washington state, follow these general guidelines (please keep in mind that these are just general guidelines, and there may be facts in your specific situation that require other or different steps to be taken):

1. Check the laws in the state where your company is incorporated. Again, some states allow companies to convert out, but others don’t. If the state where your company is incorporated does not allow it to convert out, then you can stop there. If the state where your company is incorporated does allow it to convert out, then you can continue to the next steps.
2. The conversion should be approved internally through a written consent and the adoption of a plan of conversion. If the company is an LLC, it’s typically approved by members, managers or a combination of the two. If the company is a corporation, it’s typically approved by the board of directors and shareholders.
3. The company should file Articles of Conversion with the state the company is leaving. (Some states refer to this document by a different name, and some states require additional filings as well.) 
4. The company should file Articles of Conversion, along with a Certificate of Formation and Initial Report with the Washington Secretary of State.
5. If the company already has an operating agreement (in the case of an LLC) or shareholders’ agreement (in the case of a corporation), then the company should revise that agreement to make it consistent with Washington state law.
6. The company should register with the Washington Department of Revenue, along with potentially making filings with additional Washington state government agencies, depending on the type of business the company will perform in Washington, and if it’ll have employees in Washington. Bonus: for more on what to know before relocating a business to Washington state – check out our article on the Five Things To Know Before Starting A Washington Company. 

Convert your company out of Washington state

Similar to conversions in, Washington state allows corporations, LLCs, LPs, and LLPs to convert out of the state. To convert your company out of Washington state, follow these general guidelines (again, these are just general guidelines, and there may be facts in your specific situation that require other or different steps to be taken):

1. Check the laws in the state where your company would convert into. If the state where your company would convert into doesn’t permit the conversion, you can stop there. If the state where your company would convert into does permit the conversion, then you can continue to the next steps.
2. Just like a conversion into Washington state, the conversion should be approved internally through a written consent and the adoption of a plan of conversion.
3. The company should file Articles of Conversion with the Washington Secretary of State, informing that agency that it is converting out to another state.
4. The company should file Articles of Conversion with the state that the company is converting into. (Some states refer to this document by a different name, and some states require additional filings as well.) 
5. If the company already has an operating agreement (in the case of an LLC) or shareholders’ agreement (in the case of a corporation), then the company should revise that agreement to make it consistent with the state law the company is converting into.
6. If the company is registered with the Washington Department of Revenue or any other Washington state government agencies, the company should contact those agencies to close down its accounts with them. Here’s how to close an account with the Washington Department of Revenue.
7. Depending on the state that the company converts into, it may need to register with other state agencies there as well. 

What if you continue doing business in the state your company is leaving?

If your company continues to do business in the state you’re leaving, it may not make sense to convert out. This is because most states require companies to register if they do business in the state. So, for example, if an Oregon business owner moved to Washington but kept a business address for his or her company in Oregon, the business owner would still need to maintain a business registration in Oregon for the company. In that case, it likely wouldn’t make sense to convert the company into Washington because the company would then have to re-register as a foreign company (“foreign” meaning from a state law perspective) in Oregon. 

Each state has its own definition of what “doing business means,” so the final decision about whether to convert out would depend on the states the company is leaving and going to, and what sort of business the company may continue to do in the state it is leaving. 

In summary, if you’re a business owner who is moving (or just moved), know that a conversion may be an option for you.

If you’d like help with converting your company in or out of Oregon or Washington, we can do all the work for you.