new-site/docs/dexit-readiness-assessment.md

Readiness: corporate orders + "move a company" (conversion / domestication)

Honest assessment as of 2026-06-09. Question: are we ready to take Nevada/Texas incorporation orders end-to-end (name search, accept into ERPNext, etc.), and the mechanics of moving a corp out of Delaware + annual report + EIN.

Short answer

• New NV/TX formation orders: mostly built, but NOT yet verified e2e and the DEXIT page does not point at this checkout (it points at a contact form).
• "Move a company" (DE -> NV/TX conversion/domestication): NOT built. There is no order type, no SKU, and no fulfillment for a conversion. This is the core of the DEXIT promise and is the biggest gap.
• Annual report filing in the new state: NOT built as automation. There is an annual-report-filing slug, but it is wired to the trucking admin-assisted handler (MCS150UpdateHandler), not a corporate state-filing flow.
• EIN: for a move you generally do NOT get a new EIN (see mechanics below); our ein_worker only obtains a NEW EIN, which is the wrong operation for a conversion.

So: do not turn on a "buy now" DEXIT checkout yet. Keep the page as a lead-gen "get my estimate" CTA (which it currently is) until the flow below is built + tested.

What already exists (the good news)

The corporate/formation machinery is real and reusable:

• Checkout + order intake: api/src/routes/checkout.ts has order_type: "formation", builds a Stripe line item Business Formation (<state> <LLC|CORP>), and the formation_orders table carries stripe_session_id, payment_status, erpnext_sales_order, etc. ERPNext SO creation is wired for formation orders.
• Name search: GET /api/v1/states/:code/name-search (24h cache in name_search_cache) -> calls the worker -> per-state adapter. TX uses the Comptroller Taxable Entity Search (free, no login); NV has an adapter too.
• Filing automation: scripts/formation/ is a full subsystem - formation_worker.py polls formation_orders, states/tx/adapter.py + states/nv/adapter.py implement search_name / file_llc / file_corporation via Playwright (TX = SOSDirect, requires login + ASP.NET viewstate handling), plus ein_worker.py, operating_agreement.py, document_delivery.py, registered-agent via Northwest RA, and ~55 state adapters scaffolded.
• The FormationOrder model carries entity name/alt, members, RA, addresses, shares_authorized, par_value, expedited, payment card (Relay virtual debit), and result fields (filing number, confirmation, documents).

What's missing for NEW NV/TX formation (smaller gap)

1. E2E verification. The TX/NV adapters target live state portals (SOSDirect needs an account login; both are ASP.NET/viewstate + possible CAPTCHA). We have not confirmed a clean run recently. Need: a staged dry-run (name search -> formation_orders insert -> worker pick-up -> ERPNext SO -> filing in a sandbox or a real low-stakes filing) with screenshots, and CAPTCHA handling confirmed.
2. ERPNext SO for formation exists in code; verify it actually creates the SO with the right items + state gov fee line (we hit a gap like this on the trucking compliance_batch flow - SOs weren't being created). Add NV/TX formation Items if missing (we created LLC-FORMATION / CORP-FORMATION recently).
3. Pricing/SKU sanity: TX/NV LLC = $300 gov fee, Corp = $300; expedite +$25/$50. Our corp-formation / llc-formation catalog entries need gov_fee plumbed.

What's missing for "MOVE a company" (the big gap)

This is a different operation from formation. Real-world mechanics:

The legal mechanic (two paths)

A company changes its state of incorporation by either:

• (A) Statutory conversion / domestication (preferred, cleaner): the entity re-domiciles. Delaware files a Certificate of Conversion to convert OUT (DGCL 266) and the destination state files a conversion/domestication in:
  • Texas: TBOC Ch. 10, Subch. C - "Certificate of Conversion" + new Certificate of Formation. The TX entity is a continuation of the DE entity (same legal person).
  • Nevada: NRS Ch. 92A.105+ "conversion"; file Articles of Conversion + new Nevada charter (NRS 78).
  • Florida: F.S. 607.11921+ conversion. Both DE-out and new-state-in filings are required. The entity keeps its identity, contracts, and history.
• (B) Reincorporation merger (older method, what FG Financial used): form a new NV/TX subsidiary and merge the DE parent INTO it. Requires an Agreement and Plan of Merger + stockholder vote. More moving parts; still common.

Steps a real DEXIT order involves (none automated yet)

1. Diagnose: pull the entity's current DE status, authorized shares (to estimate the franchise tax saving), good-standing, foreign qualifications.
2. Board + stockholder approval: a board resolution and (usually) a stockholder vote/consent approving the conversion or merger. **This needs the client's counsel
   • it is NOT something we file.** Our role is to prepare the plan-of-conversion / plan-of-merger documents for their counsel to review and their board to adopt.
3. Pay DE to leave: DE requires the franchise tax to be current before it will accept the Certificate of Conversion (you can't leave owing tax). So step 0 is often "file/pay the final DE franchise tax + annual report."
4. File the conversion: Certificate of Conversion OUT of DE (DGCL 266) + Certificate of Conversion/Formation INTO the destination state. Both have fees.
5. New registered agent in the destination state (recurring; we use Northwest RA).
6. First annual report / state list in the new state (NV requires an Initial List
   • State Business License at formation/domestication; TX has the Public Information Report / franchise tax with the ~$2.47M no-tax-due threshold).
7. Update downstream: foreign-qualification re-registration in states where the company operates (the domestication may need to be reflected), update the transfer agent / DTC, update EDGAR (state-of-incorporation on the next cover page), bank, etc.

EIN reality

• A conversion/domestication generally KEEPS the same EIN - the IRS treats a mere change of state of incorporation (same entity continuing) as not requiring a new EIN in most cases. So our ein_worker (which obtains a NEW EIN) is the wrong tool for a move; for a conversion we typically do nothing with the EIN, or at most file a name/address change with the IRS.
• A reincorporation MERGER into a new subsidiary can be different: if the surviving entity is genuinely new, the IRS may require a new EIN. This is a fact-specific, counsel-driven determination - we should not auto-decide it.
• Net: EIN handling for a move is advisory + occasionally a name/address update, not the automated SS-4 flow we have.

Why we can't fully automate the move

Unlike a fresh formation, a conversion is counsel-gated (board/stockholder approval, plan-of-conversion review) and DE-clearance-gated (must be current on franchise tax). The honest product is admin-assisted: we prepare and file the state paperwork and set up RA + first annual report; the client's lawyer handles the corporate-approval documents. That matches how the DEXIT page is already written ("your counsel just reviews the board and stockholder consent").

Complication: the company has foreign qualifications in other states

This is common and important. A Delaware corp that operates in California, New York, Texas, etc. is "foreign qualified" (registered as a foreign entity / has a Certificate of Authority) in each of those states. When it domesticates DE -> NV/TX, every one of those foreign registrations is affected. Getting this wrong means the company is suddenly doing business unregistered in states where it operates - default judgments, loss of court access, penalties. So this is part of the core offer, not an afterthought.

What actually has to happen to the foreign registrations

After a conversion/domestication, the entity is the same legal person but its home (domestic) state changed. In each state where it was foreign-qualified:

• The state where it is moving TO (say it domesticates to Texas but was foreign qualified in Texas): the foreign registration must be withdrawn/cancelled because the company is now a domestic Texas entity - you cannot be both foreign and domestic in the same state. (This is exactly why ~zero of our OTC sample were TX-incorporated even when TX-based: they were DE corps foreign-qualified in TX.)
• Every OTHER state it was qualified in (CA, NY, FL, etc.): the foreign qualification generally stays in place but must be updated to reflect the new state of incorporation and (often) a new formation date / charter document. States differ:
  • Some accept an amendment to the foreign registration (file an amended Application for Authority / Statement of Change reflecting the new domestic state).
  • Some require you to withdraw the old foreign registration and re-file a new one from the new home state.
  • A handful treat the domestication as a non-event if the name + identity are unchanged, requiring only an informational update at the next annual report.
• Name conflicts can surface: a name available to a DE corp as "foreign" in a state might collide on re-domestication; we should run name availability in each qualified state as part of the move.

Good news: we already have the building block

We have a working foreign-qualification capability:

• SKUs foreign-qualification-single ($149 + state fee) and foreign-qualification-multi (discounted per-state), ForeignQualificationHandler that fans out per state, a state_registrations/foreign-qual schema (migration 066/073), and the same formation state-adapter pool. So re-qualifying or amending in N states reuses existing plumbing - we don't build it from scratch.
• What's missing is the amend / withdraw modes (the handler today is oriented to new registration), and an intake step that asks "which states are you currently foreign-qualified in?" so we can fan the move out across them.

Product implication

The conversion offer should be multi-part and priced per state touched:

1. Core domestication (DE-out + new-state-in) - the base fee.
2. For each state the company is foreign-qualified in: an amend / re-qualify / withdraw line item (reuse foreign-qualification per-state pricing).
3. Withdraw the now-redundant foreign registration in the destination state if one existed.
4. Update the registered agent in each affected state where we maintain it.

This is also a revenue multiplier: a single DE corp qualified in 5 states is one domestication + ~5 foreign-qual amendments + recurring RA/annual-report in each. But it must be scoped at intake - we have to ASK for the list of states up front, estimate per-state, and disclose that government fees vary and are billed at cost.

Intake + data we must capture for a move

• current domestic state (DE), destination state (NV/TX/FL), entity type
• entity name + EIN (kept), current good-standing + franchise-tax status in DE
• the full list of states where the company is foreign-qualified (and its DBA/ assumed names in each) - this drives the per-state fan-out
• where it actually operates / has nexus (to advise whether to keep each qualification)
• whether counsel is handling the board/stockholder consent (always yes)

Recommended build plan (generic corporate flow + a "move" capability)

Keep it generic, not DEXIT-specific:

1. Catalog SKUs (in api/src/service-catalog.ts):
   • entity-conversion (move a company; admin-assisted; flat service fee + state gov fees billed at cost; destination state chosen at intake).
   • Confirm corp-formation / llc-formation carry per-state gov_fee.
   • annual-report-filing for corporate (today it points at the trucking handler).
2. Order type: add order_type: "entity_conversion" to checkout + a from_state / to_state / entity_type intake, persisted in formation_orders (or a sibling table). Reuse the Stripe + ERPNext SO path.
3. Fulfillment: a ConversionHandler (admin-assisted) that: (a) runs name availability in the destination state (existing name-search), (b) generates the plan-of-conversion + new-state charter draft for client/counsel, (c) queues the DE-out + destination-in filings for the formation_worker once the signed board/stockholder consent + DE good-standing are confirmed, (d) sets up RA + files the first annual report/state list.
4. E2E test harness: a scripted run that does name search -> creates a paid test order -> verifies formation_orders row + ERPNext SO + worker pickup, with the actual state filing stubbed/sandboxed so we don't make a real filing during tests.
5. Verify NV/TX formation e2e FIRST (smaller scope) before layering conversion on top, since conversion reuses the same filing + ERPNext + worker plumbing.

Bottom line

• The page is fine to ship as lead-gen (estimate request), which is what it does.
• We are not ready for a self-serve "buy a DE->NV/TX move" checkout. New NV/TX formation is close but unverified e2e; the conversion ("move") flow and corporate annual-report automation do not exist yet.
• Next concrete step (if you want to proceed): verify NEW NV/TX formation e2e, then build the generic entity-conversion SKU + admin-assisted handler on the existing formation plumbing.