Converting Existing LLCs to Wyoming: Domestication vs. Fresh Start #
You have two options for getting your existing LLC into Wyoming’s legal framework. Domestication converts your current LLC into a Wyoming entity. Creating a new Wyoming LLC leaves your old entity alone and gives you a separate structure specifically for digital assets.
Domestication is a legal process where your LLC changes its state of formation from wherever it currently exists to Wyoming. Your LLC’s legal identity continues. The entity doesn’t dissolve and reform. It simply changes which state’s laws govern it. Not all states allow domestication. Some require dissolution of the old entity and formation of a new one, which creates tax complications and breaks continuity.
The domestication process requires filing articles of domestication in Wyoming and articles of conversion or withdrawal in your current state. You’re telling Wyoming you want to become a Wyoming LLC. You’re telling your current state the LLC is leaving. Both states charge fees. Your operating agreement needs amendment to reflect Wyoming law. Your EIN stays the same because the legal entity continues.
Timing matters because you’re coordinating filings in two states. Most domestications take two to four weeks depending on processing times in both states. Some states process quickly, others take weeks. You’re waiting on the slower state to complete the process. During the transition period you’re dealing with administrative uncertainty about which state governs what.
Asset transfer gets complicated with domestication. Technically your LLC continues as the same entity so assets don’t transfer. Practically you’re dealing with banks, exchanges, and custody providers who see an address change and want updated documentation. Every institution holding LLC assets or accounts needs notification of the domestication and updated registration information.
Cost runs higher than most people expect. Filing fees in both states, legal fees for drafting domestication documents and amended operating agreement, notification costs for updating all business relationships. You’re spending $2,000-5,000 depending on complexity and how many business relationships need updating. That’s approaching the cost of just forming a new Wyoming LLC.
Most people choose the fresh Wyoming LLC route instead. Form a new Wyoming LLC specifically for digital assets. Transfer cryptocurrency from wherever it currently sits into the new Wyoming entity. Keep your existing LLC for whatever it currently holds. You’ve created clean separation without the complexity of domestication.
The fresh start approach gives you several advantages. Your new Wyoming LLC has an operating agreement written specifically for cryptocurrency from day one. No historical baggage from previous business activities. No mixed assets creating governance conflicts. No need to coordinate with your old state during transition. You’re simply creating a new entity and funding it with crypto.
Your existing LLC continues operating under its current state’s laws governing whatever assets it holds. Maybe it owns rental properties or traditional investments. Those stay put. The cryptocurrency moves to the new Wyoming LLC optimized for digital asset protection and management. Each entity focuses on what it does best.
Tax treatment stays simple with the fresh start approach. The transfer of cryptocurrency from your old LLC to the new Wyoming LLC might trigger a taxable event depending on structure. If both LLCs are owned by you personally, you might be able to structure it as a tax-free contribution. Work with your accountant to handle the transfer cleanly. Once completed, the new LLC operates independently with its own tax reporting.
The separation also means you’re not disrupting existing business relationships tied to your old LLC. Bank accounts, vendor relationships, contracts, leases, whatever operates through your current LLC keeps functioning normally. You’re not forcing updates across every business relationship because you domesticated the entity to a new state.
Some situations favor domestication over fresh start. Your LLC has significant contracts or licenses that reference the specific entity and would be difficult to transfer. Your LLC has established credit relationships or business history you don’t want to abandon. The LLC holds assets that can’t easily transfer without triggering taxes or transfer costs. These factors might make domestication worth the complexity.
But for digital assets specifically, the fresh start almost always makes more sense. Cryptocurrency transfers easily between entities. Wallet ownership can change with proper documentation. You’re not disrupting physical business operations or contractual relationships. The new Wyoming LLC gets you optimal legal protection without the complications of domestication.
The domestication timeline and cost often exceed what people anticipate. Between coordinating two states, updating all business relationships, amending operating agreements, and handling transition complexity, you’re spending months and significant money. Compare that to forming a fresh Wyoming LLC which takes days and costs less.
Wyoming’s charging order protection, privacy provisions, and digital asset statutes provide the most value when you’re starting with a clean structure designed for cryptocurrency. Domesticating an existing entity brings historical complexity into Wyoming’s framework. Creating a new entity lets you optimize from the beginning.
Most wealth management firms like Digital Wealth Partners focus on investment strategy and growing your portfolio. Entity domestication and formation decisions require legal and tax expertise coordinated across multiple states. That’s beyond standard investment advisory services.
Digital Ascension Group handles both paths. We can coordinate domestication if your situation requires it, including managing filings in multiple states, drafting amended operating agreements, and handling business relationship notifications. We also handle fresh Wyoming LLC formation with crypto-specific operating agreements when that makes more sense. We’re evaluating your specific situation rather than pushing one solution.
Your D’Cent cold wallet custody stays secure regardless of which path you choose. The physical custody doesn’t change. What changes is which legal entity owns the wallets and under what governance framework they operate. Keep custody and legal structure aligned.
The practical recommendation for most digital asset holders is the fresh Wyoming LLC. Clean formation, crypto-specific governance, no domestication complexity, lower cost, faster timeline. Save domestication for situations where entity continuity matters more than the hassle of achieving it.
Contact Digital Ascension Group to learn how our family office services can coordinate your complete financial picture.
