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Redomestication of an NY corporation

On Behalf of | Oct 22, 2021 | Business Formation |

Many people who start businesses in New York later find that they want to move their location of incorporation to Delaware. Delaware has a more business-friendly court system and set of regulations for the board of directors, more favorable tax rates, and other advantages. The process of moving the address of a company is called re-domestication.

Redomesticating from NYC to Delaware

A corporation can move legally to Delaware without giving up its offices or assets in New York. That way, it doesn’t have to sacrifice anything it has gained, but it still gets access to all of the Delaware benefits. Carrying this out is not as complicated as it might seem.

The easiest way to carry this out is to use the “short form” approach. First, the owner creates a new company in Delaware, a subsidiary owned by the original New York company. Then the two companies merge, leaving the assets intact but making the technical home of the company Delaware, with the subsidiary the only legal entity remaining of the two. It is a tried and true process that is a well-established and legal way to shift the legal domain of a company from New York to Delaware.

For a company that wants to take advantage of the business climate in Delaware, or has investors that prefer to have it based in Delaware, the process of shifting from New York is straightforward. It allows for the superior and more friendly business climate of Delaware to support the business while permitting it to keep its employees and other assets where they are and without any disruption to its operations.

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