BizTerm Definition
Domestication, Domestication of a Corporation
Short Definition
Making a foreign corporation domestic
Full Definition

Domesticating a corporation involves the transfer of an existing corporation from one jurisdiction (i.e. state) to another. This happens when an existing corporation relocates business operations to another state and typically ceases operation in the existing state.

Instead of simply forming a corporation in a new state and dissolving the existing corporation, domesticating offers some attractive benefits:

1. Your corporation retains the "age" or history of the existing corporate charter. This helps when it comes to establishing credit with new vedors and/or banks in the new area because your business is simply continuing operations in another state.

2. There are less tax consequenses to simply dissolving an existing corporation and having to liquidate the assets of the corporation.

3. There is no need to continue paying taxes in the existing formation state if there are no continuing operations there: This would not be the case in a Foreign Corporation.

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