Are you a business owner moving to Tennessee? Do you need to move your business to Tennessee as well?
Tennessee is currently seeing a large influx of out-of-state business owners moving to Tennessee which has led to many of these business owners looking for answers on how best to move their businesses to Tennessee. These business owners have no need to keep their businesses registered in their old state and want to register their business in Tennessee now that they live in Tennessee. However, for business reasons, they may want to keep the business’ original EIN, they may have contracts in place that they do not want to renegotiate, or they may not want to ask the other party permission to assign preexisting contracts. In these cases, a merger is a great tool for moving the business.
In order to accomplish the merger, first a new Tennessee entity is setup (often using the same name as the original business). Then an Agreement of Merger is entered into between the old entity and the new entity. Once the agreement has been executed, merger documents are filed in both the original state and Tennessee. The merger documents effectively merge the two entities together by dissolving the original entity and leaving the Tennessee entity as the surviving entity. The Tennessee entity basically steps into the shoes of the old entity assuming its EIN, bank accounts, employees, contracts, and other assets owned by the old entity.
Mergers can be one of the more complicated state filings to undertake because each state has its own merger process and most states do not have standard merger documents which can be downloaded from the applicable Secretary of States website. Furthermore, each state has specific rules regarding how a merger must be approved by the owners of the entity and what provisions must be included in the merger documents. Accordingly, it is important to work with legal counsel experienced in setting up mergers for the purpose of moving a business from one state to another.
If you are new to Tennessee and looking to move your business here as well, please call or email us to schedule a free initial consultation, during which we can discuss your business and the option of using a merger to move your business to Tennessee.