Moving Business to Another State: A Relocating Guide

Relocating a company like a corporation, limited liability company (LLC), or S-Corp can be a transformative step toward growth and profitability. With its business-friendly environment, robust economy, and JobsOhio as your dedicated partner, Ohio offers compelling reasons for businesses to consider a move. This guide delves into the benefits, legal frameworks, financial considerations, and support systems available in Ohio to assist business owners in making a well-informed decision. There is a myriad of questions that business owners should ask when considering moving a business and in addition to using this guide, we encourage you to consult a business legal expert and tax professional. This guide is not intended to be legal or tax advice.

Benefits of Relocating Your Business to Ohio

Cost Savings

Ohio is known for its lower cost of living and business operations compared to many other states. With competitive utility rates, affordable real estate, and state-specific incentives like tax credits and economic development grants, businesses can experience significant operational cost reductions. These savings make Ohio an attractive destination for businesses aiming to maximize their financial efficiency.

Expansion Opportunities

Ohio's geographic position in the central United States provides optimal access to domestic and international markets. This geographic advantage, combined with the state's commitment to maintaining a robust transportation infrastructure, allows businesses in Ohio to manage supply chains and logistics efficiently, facilitating easier expansion and access to new customer bases.

Improved Quality of Life

Business owners and their employees benefit from Ohio's enhanced quality of life, which includes world-class educational institutions, diverse cultural attractions, and abundant recreational opportunities. Many activities are free or low-cost, and these amenities elevate living standards while serving as a powerful tool for attracting and retaining top talent.

Legal Requirements: How to Set Up an LLC in Ohio

Do You Have to Change the State of Your Business if You’re Moving to Ohio?

You do not, but you can. Bottom line: you can operate your business in Ohio as a “foreign” entity, simply by registering with the Ohio Secretary of State.

Can You Change the State of Your Business?

Yes, businesses can change their registered state through a process known as domestication. This process allows the company to retain its EIN and transfer the business entity from one state to another without dissolving it in the original state, preserving its continuity.

While not all states allow domestication, Ohio does. It's indicative of the state's welcoming approach that simplifies and streamlines the process of moving your business here.

State-Specific Regulations

When relocating your business to any state, you must comply with specific legal requirements, including registration, licensing, and permits. Ohio is no different in this regard.

To set up an LLC in Ohio, you must file Articles of Organization with the Ohio Secretary of State. The process can be completed online for a fee. Additionally, Ohio requires businesses to maintain good standing through regular filings, such as biennial reports and tax submissions. The Ohio Secretary of State's Website provides the necessary forms and information to help you understand the costs and requirements specific to your situation.

Business Structure Considerations

As you relocate your business to Ohio, you'll need to decide whether to register as a new Ohio business entity, domesticate an existing entity from a previous state, or to continue your existing entity from its previous state by registering with the Ohio Secretary of State. This decision can impact tax responsibilities, legal liabilities, and business operations. The Ohio Department of Taxation's online Help Center explains the various business structures and offers additional resources to help guide your transition while aiding compliance and optimal structuring for growth.

Tax Implications of Moving Your Business to Ohio

Tax Considerations

Ohio offers a favorable tax environment for businesses with no corporate income tax on LLCs, S corporations, and partnerships; only personal income tax on net revenues for those with ownership interest. This favorable tax structure can provide significant advantages for certain types of businesses. Additionally, the state offers various tax incentives, such as property tax abatements and job creation tax credits, that can significantly reduce tax burdens for companies that relocate to Ohio.

IRS Requirements

When relocating, ensure your business's EIN is updated with the new location. It's crucial to report any business structure or location changes to the IRS to maintain compliance. This includes updating forms and potentially restructuring your business for tax purposes. Consult the Ohio Department of Taxation or a tax professional to help with your situation.

Can I Keep My EIN If I Move to Another State?

Yes, your EIN remains with your business as long as the business entity or ownership structure does not change. This IRS publication explains how to update your business information with the IRS. This is not meant to be a comprehensive tax guide and we encourage you to seek counsel from a tax professional to evaluate your specific situation.

Financial Considerations for Business Relocation

Budgeting and Financial Planning

Effective financial planning is crucial when relocating a business. This includes budgeting for moving expenses, equipment transportation, and potential facility upgrades, as well as the changes in ongoing operational expenses that come with operating in a new state.

Ohio offers various financing options, such as small business loans and incentives that can help manage the financial aspects of relocating.

Return on Investment

Relocating to Ohio should be viewed as an investment. When evaluating the potential ROI, factor in reduced operational costs, tax savings, potential growth in new markets, and the long-term benefits of a supportive business climate.

Workforce and Talent Pool in Ohio

Access to a skilled and talented workforce is critical for the success of any business, and Ohio delivers on this front. With over 100 colleges and universities, including Case Western Reserve University, the University of Cincinnati, and the Ohio State University, the state is home to renowned research institutions that foster a highly skilled workforce. Businesses can leverage this by collaborating with local educational institutions for recruitment and training programs. Ohio's commitment to workforce development also extends to technical certifications, job training, upskilling, and candidate matching. The state offers various programs and initiatives to support businesses in finding, training, and retaining top talent.

Networking and Business Opportunities in Ohio

Business Community Overview

Active chambers of commerce, industry clusters, and a network of entrepreneurs support Ohio's vibrant business ecosystem. Ohio is unique in that it offers three tier-1 metropolitans with Cincinnati, Cleveland, and Columbus, several medium-sized cities like Dayton, Toledo, and Youngstown, and dozens of small towns that provide a close-knit community feel with amenities needed to support small businesses. These resources provide a rich environment for business development and collaboration. Some of Ohio's small towns are ranked the best in the country for business growth.

Networking Strategies

Effective networking is essential for business success. Effective networking in Ohio can be facilitated through participation in local trade shows, local and state chambers of commerce, business meet-ups, and state-sponsored business events. These activities are crucial for integrating into the local business community and finding potential business partners.

Support Services for Business Relocation

JobsOhio Small Business Grant

The JobsOhio Small Business Grant provides funding for real estate investments, equipment, and more so you can grow your business. Grant funding is financial support for small businesses that meet program guidelines and are in qualifying zip codes or owned by eligible populations. Learn more and take the first step here on the JobsOhio website.

Government Assistance Programs

Ohio provides numerous support services for businesses relocating to the state. These include grants, tax incentives, and tailored programs that support small business growth and development. A great place to start is with the Ohio Small Business Development Centers.

Professional Services

Relocating a business involves complex logistics. Professional service providers like relocation specialists, real estate agents, legal advisors, and financial consultants can assist you in making important decisions about your business. These professionals play a crucial role in ensuring a smooth transition by navigating the legal, financial, and logistical aspects of moving a business to Ohio.

The Goldman Sachs 10,000 Small Businesses Initiative in Ohio

The Goldman Sachs 10,000 Small Businesses initiative is a significant resource for Ohio small businesses, providing tools, education, and support to foster growth. Ohio businesses can benefit from this program, which includes details on eligibility, application processes, and the types of assistance offered. In just six months after completing the program, 66% of alums report increases in revenues, and 44% report creating new jobs.

Conclusion

You may see that, while it can feel daunting, opening a business can be broken down into manageable, actionable steps. If you genuinely have a passion for entrepreneurship that you wish to explore, you should do so — After all, small businesses are the backbone of the American economy.

Relocating a business to Ohio presents a promising opportunity for growth, savings, and enhanced quality of life for entrepreneurs and their employees. By understanding Ohio's various legal requirements, tax implications, and support systems, business owners can make informed decisions that align with their long-term growth strategies. This guide serves as a foundational tool to help navigate the complexities of moving a business from state to state with a focus on thriving in Ohio's dynamic economic ecosystem.

This guide equips you with some of the necessary information to evaluate Ohio as a potential new home for your business, emphasizing practical steps, strategic advice, and critical considerations to ensure your relocation is successful and beneficial.