An accountant in Philadelphia, PA Philly

5 Replies

Dear BP community (specifically the Philadelphia part of it),

If you know an inexpensive and trustworthy accountant in Philly, who can help me to transfer my LLC from NYS to PA, please, pass along his info.

Thank you all in advance,

E.M.

@Eli M.

What do you mean "transfer"? Are you talking about domestication? If so, that's more of a lawyer matter than a CPA matter although maybe there are some tax consequences.

Why are you look domesticate? If you have a single member LLC, you can open a new LLC in PA for the cost of domestication. That's especially true since you likely need to take the same steps as opening the LLC (e.g. filing paperwork with the PA Department of State, amending the operating agreement, filing fees, etc.).

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

Originally posted by @Chris K. :

@Eli M.

What do you mean "transfer"? Are you talking about domestication? If so, that's more of a lawyer matter than a CPA matter although maybe there are some tax consequences.

Why are you look domesticate? If you have a single member LLC, you can open a new LLC in PA for the cost of domestication. That's especially true since you likely need to take the same steps as opening the LLC (e.g. filing paperwork with the PA Department of State, amending the operating agreement, filing fees, etc.).

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

I want to transfer because I have a house on my LLC which is registered in NYS but it would be much easier for me to obtain financing for that house if my LLC would be registered in PA. I don't think I could just close my LLC in NYS if I have a deed with that LLC's name on it, can I?

@Eli M.

The situation with your lender sounds a bit odd but I suppose different strokes for different lenders. 

I can't remember what the NY Realty Transfer Tax rates are but I recall it being significantly cheaper than PA. So I'm not sure which option is cheaper: 

  • Open a new PA LLC and transfer the property from NY LLC to the PA LLC.
  • Or go through the domestication process. 

As a lawyer, I personally never saw anyone go through the domestication process for these reasons. The last time I had to do a domestication, the client ended up paying a fair bit in professional fees due to: (1) having to pay a PA lawyer to handle the domestication work; (2) having to pay a lawyer in the original state to handle whatever he needed to do over there to comply with that state's law; and (3) bunch of filing fees and publications on both sides. But that was much larger, complex deal than this and it had to get done for business reasons. 

Going back to my original, I guess I don't see why a lender would care why an LLC is domesticated in NY versus PA if the underlying property is in NY.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Eli M.

Ah. Then yeah, probably domestication is your best bet since you would have to pay the full realty transfer tax. Sadly, it probably won't be cheap to get it done properly. Not 100% sure what the process is in NY but typically you have to file paperwork in both states. Between legal/professional costs and filing fees, you are probably looking at anywhere between $1500 to $3000. Even more, depending on how bad the NY fees are.  

Maybe you could find a non-attorney service to do it for cheaper. But it isn't the simplest process. 

Does the lender really want the LLC to get domesticated? Or just registered as a foreign entity? One is infinitely cheaper than the other.

I still don't see why the lender cares about this. Did they give you a reasoning for it? Is it a non-traditional lender. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.