A foreign limited liability company (LLC) is an LLC that operates in a state other than the one in which it’s registered. If you have an LLC and plan to expand your business to other states, you’ll likely need to register as a foreign LLC.
For instance, if you initially formed your LLC in Ohio and now want to expand to Indiana, you’ll need to register as a foreign LLC in Indiana. It can be a complicated process, but lucky for you; this guide lays out all you need to know about registering as a foreign LLC.
What Is an LLC?
An LLC is a popular business structure for startup companies due to its many benefits. An LLC provides personal liability protection, for example, so your assets are not at risk if your business is sued or cannot pay its debts.
Also, an LLC is a “pass-through entity” in taxes, meaning that the LLC itself is not taxed. Instead, income passes through the company to the LLC owners or members, who report it on their tax returns. LLCs also offer flexibility in management, as there are few requirements regarding organizational structure.
Under What Circumstances Do I Have to Register as a Foreign LLC?
Each state has rules on what constitutes doing business in their state, so it’s important to check with the relevant state to determine when foreign LLC registration is required.
As a general rule, you must register as a foreign LLC if:
- You have a physical presence of any kind in that state
- You have employees in that state
- You regularly meet with clients, managers, or investors in that state
- You are licensed to do business in that state
In some states, you must register as a foreign LLC if you have a business bank account or business property in that state. On the other hand, if you have an online business and make sales in multiple states, you’re probably not required to register as a foreign LLC in those states.
How to Register a Foreign LLC
If you haven’t done so already, you’ll need to form your LLC in your home state before you can register as a foreign LLC in a new state. The process to register a foreign LLC is similar to the process of forming an LLC in your home state.
1. Choose a Registered Agent in the New State
You must have a registered agent in any state where you register an LLC, foreign or standard. A registered agent is a person or company authorized to accept and respond to official correspondence on behalf of your business, such as legal, tax, or financial documents.
Many business owners choose to hire a registered agent service, which will make sure all important documents are received and addressed promptly. A registered agent service also offers convenience.
If you choose to be your registered agent, you’ll have to be available at your registered agent’s address during regular business hours. However, a registered agent service, particularly one that works nationwide, will give you the flexibility and freedom to run and grow your business.
2. Choose a Name for Your Foreign LLC
You’ll need a name for your foreign LLC that meets the new state’s naming requirements. First, check with the new state’s Secretary of State to see their name regulations. You’ll also need to search their website to see if the name is available.
3. Register Your Foreign LLC
Be sure to review the state’s process for registering a foreign LLC, which will likely involve filing articles of organization. You’ll most likely need the following information:
- LLC name and DBA in your home state
- State where LLC was originally registered and date of formation
- Street address of original LLC
- Street address of LLC in the state in which you register as foreign
- Name and address of the registered agent
- Original LLC registration documents from home state
You may also be required to provide a certificate of good standing from your home state.
4. Get Business Licenses and Permits
You’ll need to check with the state and local governments of the new business location to see which business licenses and permits are required for your business.
5. Check Annual Report Requirements
Just as you do in your home state, you’ll likely need to file annual reports and pay associated fees in the new state. So, again, check with the state for reporting requirements.
Registering a foreign LLC is relatively straightforward, but it’s required if you’re doing business in states other than your home state. You’ll have to meet the regulations of all the states where your LLC registers, so always review the state’s laws and filing requirements.
If you hire a registered agent service like ZenBusiness, they will send reminders of due dates to ensure your LLC is always in compliance.