Relocation of an S-corp to a new state

I found no problem with that. Just establish new corporation in new home state and continue to march.

It's only an instance of changing from one state to another.

ChEAR$, Harlan Lunsford, EA n LA

So a new EIN isn't necessary for the new corporation? I'm aware that when there's a merger the joint company can choose which company's bank routing number (on checks) to use. But I'm not aware of how that works for EIN's.

The OP stated he was "moving" an S-corp from State A to State B. If, this was just a change in physical location, then the EIN is okay. If the charter moved, i.e., a new corporation chartered in State B was created, then a new EIN is also required.

He also said it was going to be a tax-free reorganization. You don't do that unless another corporation formed in the new state is involved.

That's what I thought.

More detail: LLC #1 was established in State A as a home-based service business and has an extensive credit and banking history. LLC elected S-corp treatment when it was set up. LLC #1 member/manager has relocated to State B, and there is no longer a presence in State A nor a need to keep the LLC operating in State A. This will also avoid having to register as a foreign LLC in State B and file multiple state tax returns.

The research I've done seems to indicate that it would be necessary to set up LLC #2 in State B (and elect S status), and then LLC #2 acquires LLC #1 as a QSub, and dissolves LLC #1 and proceeds to use LLC #1's EIN.

It seems like a lot of paperwork to go through, but perhaps I'm overcomplicating the process?

Bill B.

Nope. not required, and that was my point.

My client's corporation was originally chartered by Texas, and operated as such for a number of years with requisite Texas returns filed. Actually all operations had been conducted from here during that period; the headquarters just was in Dallas.

But ten years later, the Dallas "headquarters" was closed down and all addreses of record changed to here. Accordingly a new state corporation was formed to take over and the TX charter given up. Same EIN throughout.

Heck, I never even THOUGH to ask IRS if that was okay. grin

ChEAr$, Harlan Lunsford, EA n LA

If you want to continue to use the State A Corporate EIN, then the only way to do that is through some form of merger whereby the State B corp. is the surviving entity. Otherwise, you just create State B corp. with new EIN and dissolve State A corp.

I´m not sure why you think you need to retain the old EIN just because there is ¨quite a bit of history.¨

You may want to take a look at Rev. Rul. 57-276. It briefly lays out the process. Please note the "57" means it was issued in 1957. 368(a)(1)(F) has been amended since then.

While the Rev. Rul. does not specifically address the EIN question you will note it addresses most other carryover issues. For the EIN question you can refer to Letter Ruling

200528021. While it refers to an operating corporation switching to an LLC, taxed as a corporation, the principles still hold.

Drew Edmundson, CPA Cary, NC