Redomesticating a Company After the Purchase of an Arizona Business

With a growing population and favorable business environment, Arizona is a popular destination for companies from around the United States. Depending on the circumstances, a business owner might feel that the best way to make this move is to acquire, or merge with, a company already operating here. If this happens, the out-of-state company could opt to make Arizona its legal home.

When a company based in another state acquires an Arizona business and decides to establish a consolidated legal domicile in Arizona, it must successfully complete several steps. This procedure, sometimes referred to as a downstream migration, starts when the company files plan of domestication with the Arizona Corporation Commission. The plan must include the name of the domesticating entity, the state or jurisdiction where it was originally formed, and the terms and conditions of the domestication.

During redomestication, a company has responsibilities in the state it is leaving, as well as its new home. On the Arizona side, the company has to confirm that the business complies with the state’s naming requirements. It is also imperative to find out what licenses and permits are necessary for legal operation, as rules vary widely between states.

Once the business has created a new entity in Arizona, it must formally dissolve or withdraw its legal existence in its prior location. Typically, this can be done by filing articles of dissolution or a certificate of withdrawal with the appropriate state authority. Sometimes, breaking ties with a state is delayed by questions over tax obligations or pending administrative matters.

A mistake in either state could cause significant problems. Owners might be exposed to personal liability if they dissolve the legal structure in their old state before finalizing the formation process here. You should also conduct a thorough review of tax and contractual obligations before committing to the relocation.

An experienced Arizona business law attorney can guide your business through the redomestication process from start to finish. This includes the preparation of filings and counsel regarding Arizona regulatory provisions.

The Law Offices of Donald W. Hudspeth P.C. assists businesses with redomestication issues arising out of mergers and acquisitions, as well as other legal matters. To schedule a consultation in our Phoenix office, call 866-696-2033 or contact us online.