The Model Entity Transaction Act or META is a uniform model law, drafted by the Uniform Law Commission, which provides an outline for business licensing transactions across different state lines and entity types. META’s objective is to solve the historical problem arising from each state having its own collage of rules for mergers, conversions, and domestications, often creating ambiguity, resistance, and unforeseen legal pitfalls when a business wants to move from one state to another.
META and Non-META States
States like Nevada and Arizona have existing versions of META guidelines in their statutes. This creates a predictable route for businesses moving in and out of these states. When both the home state and new state have META based laws, the process is more simplified. These states will usually require specific documents such as a “Plan of Domestication” and “Articles of Domestication” when filing with the state’s designated licensing department. In addition to standardized documentation, specific laws such as Nevada (NRS Chapter 92A) and Arizona (ARS Title 10, Chapter 13; Title 29) are robust, META-inspired domestication laws.
Non-META states lack a clear, straightforward procedure for the domestication of corporations or LLCs. In these states, the leading method to change an entity’s home state is a “cross-state merger” or “statutory conversion” into a new entity in the target state. Some known non-META states include:
1. California
2. Kansas
3. Massachusetts
4. Mississippi (for corporations; allows LLC domestication)
5. Missouri
6. New York
7. Pennsylvania (not full domestication)
It’s recommended to check with attorneys licensed in these states as state laws and regulations have ongoing legislation when faced with federal guidelines. For a more detailed, step-by-step, look into domestication into Nevada check out our previous blog here: Moving Your Business Entity To Nevada.
The Model Entity Transaction Act is a modern law designed to make business decision making easier when it comes to relocating your company for better rules, lower taxes, or other strategic advantages. However, it is a serious undertaking, and expert legal guidance is recommended. Contact a Nevada business attorney today if you are interested in moving your company to Nevada.
