Cost reductions, raising capital, and company growth, these are just a few reasons why companies decide to relocate their headquarters. Before moving and changing your company address, you’ll want to make sure you’ve considered the necessary compliance actions for your business. These tasks, if left unattended or forgotten, can lead to major penalties or problems for your company in the future.
- Maintain the state of incorporation.
Determine whether the company must qualify to do business and apply for a business license if moving to a new state. The steps for this will vary depending on the states involved, the industry your company is in, and the structure of your business. The options can range from merging the old entity to a new entity, domesticating the old entity if possible, converting the old entity, or registering as a foreign entity. Any reorganization could also result in tax implications.
- Update federal and state tax departments.
Update any necessary information with the IRS. Local state tax departments will also need to be notified and updated. Failing to update or file the required documents for the change of address may result in fines or penalties.
- Update city and/or county agencies.
Licenses and permits needed to operate (gaming, food services, waste management, etc.) will have to be updated. It’s important to make sure the company obtains or closes accounts with these local agencies as needed. Keep in mind that the new city or county may have different requirements.
- Update other government agencies.
Additional agencies may also require updating for the change of address. Public companies may need additional actions from the SEC. Intellectual property may need updating with the USPTO. Other filings like UCC-1 financing statements may also need attention as unregistered changes could render the filing ineffective and affect your priority to be paid.
- Get written approval within the company.
The board of directors or managing members of the company will have to sign off on the move. The move should be approved in advance and in writing. Corporate counsel should review the company’s governing documents for any consent or amendments required.
- Address any employee issues.
Notify employees and consider the impact of the move. You will need to relocate, terminate, transition to remote work, and hire employees as needed. Layoffs may trigger a federal Worker Adjustment and Retraining Notification (WARN Act). Review your employee handbook and other employment-related policies to confirm that they comply with applicable state laws and regulations.
- Notify necessary third parties.
Customers, suppliers, and other third parties will need to be notified. You may need to obtain or update any contracts or consents from other businesses for the change of address. If the move nullifies the necessity for the third party, their contracts may need to be reviewed and terminated. It is important to properly terminate under the contract terms to minimize any penalties and accrued fees.
- Acquire, lease, sell real estate.
Conducting due diligence, negotiating, and closing on commercial real estate for the new location may be necessary. If the company is currently leasing its space and the move is needed before the current lease expires, legal counsel may need to review the lease for termination or sublease provisions. Whether acquiring or leasing the new location for the business, it is best to have the documents reviewed by an attorney.
Moving your headquarters can be a headache but can also save your company a lot of money in the long run. This decision can be a difficult one with many variables to weigh. It is best to discuss this decision with an experienced business attorney that can walk you through each of these areas. Careful planning with legal expertise can make for a smoother transition.