In today’s interconnected world, determining when to register your business in another state has become a pressing concern, given how geographical boundaries seem almost nonexistent in the digital landscape.
The surge of online platforms means small business owners are frequently collaborating with virtual teams, forming distant partnerships, and entering into agreements with clients they’ve never met face-to-face.
Amidst this web of global interactions, discerning the boundaries of business operations becomes a challenge.
Could there be inadvertent breaches of state regulations due to a lack of proper registration? Allow us to dissect this intricate landscape, offering clarity on the nuances of out-of-state business registrations.
When to Foreign Qualify Your Business in Another State
Navigating the intricacies of registering a business in another state can be complex. The decision hinges on various factors, primarily centered around the nature and extent of your business activities in the new state. Here are key considerations to help you determine when to undertake this crucial step:
- Physical Presence: If your LLC or corporation has an office, retail store, or other physical presence in another state, you may need to register there.
- Frequent In-Person Meetings: Regular, face-to-face interactions with clients in a particular state can necessitate registration.
- Revenue Source: If a significant portion of your company’s revenue is derived from activities in another state, consider foreign qualification.
- Employee Presence: Employing workers in another state and paying state payroll taxes is a strong indicator for registration requirements.
State Business Licenses: If you have obtained a business license in another state, it’s a clear sign of conducting business there, necessitating registration.
Examples of When to Register
- Expanding a physical business like a restaurant across state lines.
- Operating in one state while being physically located in another.
- A business partner in another state contributing significantly to client acquisition.
Freelancers and Online Businesses
For businesses like freelancing where work is predominantly online and clients are nationwide, physical location-based registration may not be necessary.
Remember, consulting with a legal or financial advisor can provide personalized advice tailored to your specific business circumstances.
Process for Foreign Qualification
- Submitting an application to the Secretary of State’s office in the state you wish to operate.
- Some states require a Certificate of Authority or Statement & Designation by a Foreign Corporation.
- Providing a certificate of good standing from your home state might be necessary.
Legal and Financial Implications
- Foreign qualification helps avoid fines, interest on unpaid taxes, and legal limitations like the inability to file lawsuits in the state.
- Ensuring legal compliance is crucial for smooth business operations and avoiding unforeseen challenges.
Foreign Qualification: Business in Another State
“Doing Business” in Another State
Consider this – if your enterprise forays into territories outside the state of its incorporation or where you’ve established an LLC, it’s essential to get it registered in these new jurisdictions.
A term you’ll frequently encounter in this context is “foreign qualification.” Pondering over the phrase “conducting business,” let’s frame it with an example: suppose a client from Oklahoma acquires your product, but your operational base is in Nevada.
Does this single transaction translate to you conducting business in Oklahoma?
To shed light on such intricacies, in this situation, you’re not technically operating within Oklahoma’s borders.
Questions to ask to see if you need to file a foreign qualification for a state:
- Does your LLC or corporation have a physical presence in the state (i.e. office, restaurant, or retail store)?
- Do you often conduct in-person meetings with clients in the state?
- Does a significant portion of your company’s revenue come from the state?
- Do any of your employees work in the state? Do you pay state payroll taxes?
- Did you apply for a business license in the state?
If you answered yes to any of these, your business may need to file a foreign qualification in that state.
Examples of Foreign Qualifications
Here are some examples of common situations when you need to foreign qualify and when you don’t.
- Let’s say you operate a restaurant in North Carolina and want to expand into South Carolina. You’ll need to file a foreign qualification in South Carolina.
- You incorporated your business in Nevada, but you are physically located in California. You need to foreign qualify in California.
- You live in Massachusetts and your business partner lives in California. The company is incorporated in Massachusetts, but lately your partner has been bringing in the bulk of your company’s clients and meeting with them in California. You need to foreign qualify the business in California.
- You are a freelancer who formed an LLC for your business in Florida. You perform the majority of your work online, and have clients all over the country. In this case, you don’t need to file a foreign qualification, since you’re not frequently physically meeting in another state. Just because you are bringing in revenue from customers in other states doesn’t mean you are transacting business there according to the law.
If you have any questions about whether or not your business needs to foreign qualify, you should check with your attorney or accountant.
How to Foreign Qualify
When looking to extend your business activities beyond your home state, it’s imperative to be aware of the necessary procedures. This involves submitting an application, typically to the Secretary of State’s office in the state you’re targeting.
The document might be termed a Certificate of Authority or, in some cases, the Statement & Designation by a Foreign Corporation.
If navigating this seems daunting, there’s no need for concern. You have the option to liaise directly with the Secretary of State’s office or engage the expertise of the agency that assisted in your initial business setup. They’re well-equipped to guide you through.
Engaging in inter-state business isn’t just about paperwork; it’s about ensuring you’re in good standing with every state involved.
It’s crucial to recognize that, while the registration process might seem straightforward, there are nuances to consider.
Several states will ask you to provide a certificate of good standing from the state where your LLC or corporation was initially registered.
Essentially, this verifies that you’ve been diligent with your taxes and have complied with all required filings in your home state.
The Bottom Line
Being legally bound to foreign qualify isn’t a light matter. Abiding by the regulations safeguards your business from potentially hefty fines, accrued interest, and the daunting task of settling back taxes for periods you operated unregistered.
Beyond the financial implications, there’s a legal dimension to consider. If your business isn’t registered, you can’t legally initiate lawsuits in that state—a right you’d certainly want to retain.
Prioritizing this legal step is more than just compliance; it’s about fortifying your business’s future against unforeseen challenges and potential setbacks.
To help you quickly gauge whether you might need to foreign qualify in another state, refer to the comparison table below which summarizes the key criteria discussed in this article:
| Criteria | Description | Do I Need to Foreign Qualify? |
|---|---|---|
| Physical Presence | Having an office, restaurant, retail store, or other physical establishment in another state. | Yes |
| In-Person Meetings | Frequently conducting face-to-face meetings with clients or partners in another state. | Yes |
| Revenue | A significant portion of the company’s revenue comes from that state. | Yes |
| Employees | If you have employees working in the state and you pay state payroll taxes. | Yes |
| Business License | Applied for or have a business license in the state. | Yes |
| Online Business | Conducting business primarily online with clients from various states, without frequent physical interactions. | No |
| Single Transaction | An isolated transaction like a sale to a customer in another state without other physical business operations there. | No |
Map Photo via Shutterstock
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Great advice Nellie. This government stuff is hard to stay on top of.
Registering business to another state may benefit your company more. But its not easy to be qualified. You have to processed the requirements that is needed first. And paying taxes is relevant to the business owners, but they will be more attentive in paying it because the government is so strict in terms of that.
I understand that once I have established my LLC IN FLORIDA to sell products from my CALIFORNIA CORPORATION (I have a residence there and will pay state taxes on sales there, etc.) , a company can then – once they received their “certificate to operate” from Florida’s Secretary of State Office, move their LLC to Delaware?
this prevents most frivolous lawsuits from Flrodians since they must travel now to Delaware in order to appear… etc. Please straighten out my muddled thinking here. thank you.
Hi Robert,
Thanks for reading my post and commenting! Yes, it seems you are a bit confused. 😉 I suggest calling my office for a free business consultation. Please ask directly for Amanda Beren and she will help you sort this out: http://bit.ly/1q1SgaW
-Nellie
I have started an “S” corporation in Florida to buy a franchise. I have now found a location in California instead for the business. I was told that to be able to do the franchise here in California, I need to register the ” S” corporation in California first. Does anyone know, What do I have to do and what do I need in order to do that? Do you know where do I go in Los Angeles?
Thanks for any help
Hi Josefina,
It sounds like you are referring to a foreign qualification. This is a filing that must be submitted to the Secretary of State. It can be a little tricky because there are documents that will need to be obtained from the home state before applying in the new state. My company assists with filing foreign qualifications and would be happy ot assist you. Just give my office a call at 888-449-2638 x110, and ask for Katie Hendrix at extension 110. She’d be happy to offer you a free business consultation.
-Nellie
I have a few questions regarding foreign qualification. I started my LLC in Louisiana but I recently moved to Florida. I am the only member and sole employee of an online Forensic consulting business. I strictly consult with clients online from all over the country. Before I moved to Florida I listed my business address as my home address and was also listed as the registered agent. My questions are this: (1) can I change my business address to my mom’s address in Louisiana and list her as the registered agent? (2) do I need to register as a foreign LLC in Florida now that I have moved? My lease in Florida does not allow the operation of any business from the home. (3) If I do have to qualify as a foreign LLC in Florida can I just use a registered agent service for the address in Florida or do I have to have an actual business location address in addition to the registered agent?
Hi Nellie! Quick question. Our finance director lives in Florida and it is the only reason we are applying for a non-profit bank account–she will be our financial custodian for the account. Other than that, we have no relationship or business with or in Florida. The rest of our board of directors are spread out geographically around the U.S. and we have no board members in North Carolina anymore. A bank employee is saying we have to register with sunbiz.org, but that doesn’t make sense just to open a bank account. and I know lots of time organization representatives say things out of ignorance or incompetence. We’re a national non-profit registered in North Carolina as a corporation and 501c3. Any thoughts?
Hello,
Thank you so much for reading and commenting. As you know I am unable to provide any legal, tax or financial advice so am unable to speak to your specific situation. However, I am more than happy to provide some general information on the topics. Please give Amanda Nunez in my office a call at (888) 449-2638 ext 111 as she will be able to answer all your questions and give you the state requirements your looking for. Thanks again and we look forward to hearing from you!
Hi Nailah,
Thanks so much for reading and commenting. While I cannot give any specific legal, tax or financial advice, I am be more than happy to provide general information in regards to opening a bank account. Some banks require a presence in the state where the bank is located before they will open an account. This can depend on the state or the bank and sometimes, it can be easier to open a bank account in the state where the business is physically located or filed. Give Amanda Beren in our office a call at (888) 449-2638 ext 105 to determine if you are using the most business friendly bank available or if there are other options. Thanks again and we look forward to hearing from you!
We have a query concerning the post, where am i able to make contact with the author?
Hi Alexander –
Yes, you can reach out to info@CorpNet.com anytime. Also feel free to give my office a call at 888-449-2638 x110, and ask for Katie Hendrix at extension 110. She’d be happy to offer you a free business consultation.
-Nellie
I’m venturing into a new business that involves all purchases via internet with independent contractions completing the job in OK. My business partner and I live in different states and my partner will be in OK. I gather the business must be registered in OK but can the business be registered in both our names even though I don’t live in OK.
Hi!
Great question. Yes, absolutely. The fact that you are not located in the state of Oklahoma does not prohibit you from having ownership within a company registered in Oklahoma. If you have any further questions or would like assistance with registering your business in the state of Oklahoma, please feel free to contact Katie Hendrix in my office at 888.449.2638 x110.
My business is registered in Wyoming, I have an office there but I currently live in Michigan. Clients come to my website via google and other sites linking to mine, there are no traditional meetings or physical outreach being done but I want to open a new business bank account while I am still here in Michigan. Will I need to file as a foreign Entity to open the account?
Hi Dave,
It will depend on the policy of your particular bank. The rule of thumb, however, is if the company is physically located or has employees in a state other than the state it’s registered in, a foreign qualification is usually required. If you have any other questions or need assistance in filing your foreign qualification, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.
Approximately how much is it on average to file to do business in a different state? I understand it probably varies
Hi Dave,
I would recommend contacting Katie Hendrix in my office for a free business consultation. With a little more information from you, she can assist you and get a better of idea of what may be required for your specific situation. She can be reached at 888.449.2638 x110.
Hi Brian,
Great question. You’re absolutely right – it varies a lot! State fees can range anywhere from about $50 to about $600. If you’d like, you can contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110. If you let her know what your home state is, and what state you’re foreign qualifying into, she can give you an exact cost. She can even assist you with taking care of the filing!
I have a question about a rental property. If I have an LLC in Connecticut but my rental property is in Rhode Island do I need to register in RI? I typically do not have contact with the renters.. It is usually just through email and snail mail. Occasionally a real estate agent will find a renter.
Hi Rich,
Generally, if the physical address of the business is located in a state other than the LLC’s state of registration, a foreign qualification is required. Please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110, and she would be happy to lay out your options for you!
Thank you
I may be in contact with your office
Sounds great, thanks Rich.
Hi all,
I was sued by a Delaware Corporation in the state of California, how can I find out if they had foreign qualification to sue me in California?
Hi Andree,
I would recommend speaking with an attorney, as they would best be able to assist you with this legal matter.
My employer currently has an LLC out of Florida and has recently hired me; I live in Texas.
What steps does he need to take to be legal?
Thank you!
Hi Nellie,
I currently have my own LLC in Idaho where I am the sole proprietor for consulting services. I pay Idaho and federal taxes. I have an offer for contracting work in Nevada where they do not have state income tax. I will be travelling back and forth, a week on, a week off for a few months. They offered to pay a per diem amount on top of my daily fee to cover my expenses while in the state. Do I need to file for a foreign qualification?
Hi Bonnie,
Great question. The general rule of thumb is a foreign qualification is typically required if the company has a physical address outside of the home state, or employees outside the home state. If you have any further questions, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.
What if the employee works at home in another state (editor). Would you need to typically register to business in the employee’s state to do business.
Hi Jeff,
Requirements can vary depending on the state and the situation, however, generally anytime an employee is located in another state (whether it’s at a home address, office address, storefront, etc.), a foreign qualification Is required. If you need assistance with this filing or have any additional questions, please contact Katie Hendrix in my office at 888.449.2638 x110.
I have an Oklahoma LLC. We do all of our work in our only location which is here in Oklahoma. Recently a customer asked us to assist in the field installation of our equipment. This may happen again as well. Do we need to register in Montana where the field installation will be? We would be sending our Oklahoma employees to Montana. The work may last one to two weeks.
Hi Lori,
Thank you for your question. While requirements can vary depending on the situation, the general rule of thumb is that a foreign qualification is required if the company has a physical address in a foreign state, or employees in another state. If you still have further questions, please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.
Hi Nellie,
Thanks for writing your article. As a vendor, planning on doing business in another state and hiring a sales person for a short period of time, would I be required to register as foreign qualified?
Thanks
Hi Sunita,
Generally the rule of thumb is that if the company will have physical locations in other states, or employees in other states, a foreign qualification is usually required. If you have any further questions or would like assistance with filing a foreign qualification, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.
Hello Nellie,
My partner and I want to start a LLC. He lives in CA and I live in NY. We anticipate working in our respective states and as the business grows we plan to hire employees in both states. Do we need to register our company in both states or only one state and then apply for foreign qualification for the other state? Are there any tax implications for registering in one state vs another? or do we simply pay our respective state tax? Thanks.
Hi Kent,
Generally speaking, it is usually required to foreign qualify a corporation or LLC if it has a physical address and/or employees in any state other than the home filing state. As for taxes, I would recommend speaking with an accountant or CPA, as they would best be able to assist you with your specific tax questions. If you have any further questions, or would like assistance in filing the LLC and the foreign qualifications, please contact Katie Hendrix in my office at 888.449.2638 x110 or by email at katie@corpnet.com
I worked for a company at their Texas location. This company is registered and based in Illinois, not in Texas. That company did NOT pay me for the last 3 weeks I worked there. I filed a claim with the Texas Workforce Commission to get them to pay me. I won the original claim, the company appealed. I won the appeal with the TWC awarding me even more $$ than I originally asked for since the company was listing me as an IC and illegally removing other “expenses” from my checks, when it was proven I was an employee. The company has appealed again. I’m sure I’m going to win this third appeal too. I know the company will appeal it again. The TWC told me that the next appeal would then go to a court of law in Texas. I no longer live in Texas and the company knows full well that I will not be able to afford a lawyer, nor be able to drive down to Texas for court and I’m sure that’s why they keep appealing, to get out of paying me.
My question is this: Since this IL company did not foreign qualify to do business in Texas and the last paragraph of your article above states “you lose the ability to sue in a state where you are not foreign qualified.”, will the company still be able to appeal the TWC decision to a court of law?
Hi Karen,
Thanks so much for reading and commenting! Unfortunately I cannot provide legal advice so cannot answer your query. I suggest looking into getting some advice from an attorney. Thanks for understanding and best of luck!
Thank you for the article, not quite sure though where my company stands. I have an LLC formed in Oregon, I am the only member of the company. I fly all over the US installing batting cages, I am usually onsite 3 days. Last year I did about 60% of business in CA, 20% in OR, 5% in CO, 5% in NY, and the rest in various states. I am only selling my services, there is no product being sold. Do I need to register as foreign entity in every state I go to, or just the ones I frequent regularly?
Hi Alan,
Thanks so much for reading and commenting. Generally speaking, in order for you to determine whether or not a foreign qualification is required, the best thing to do is determine whether or not a business license is required in the states you are doing business or if the state would require you to pay taxes. If either of those are required, then generally a foreign qualification would be required. I hope this answers your questions and if you have any further questions, please feel free to reach out to Talia, one of my Business Filing Specialists at (888) 449-2638. Thanks again and we look forward to hearing from you!
Hi Nellie,
What a great series of questions and answers. You provide a great deal of good advice. My question is that I am registered as a corporation in Wyoming. I operate via Fulfillment by Amazon where I ship my products to them and they sell and remit sales monies back to me. I live in Florida, I don’t do business with a retail store here, just basically make the plastic parts here and have them sent them to Amazon for sales. Do I need to maintain a foreign corporate entity in Florida?
Hi Mark,
Thanks so much for reaching out to us and for your kind words. I am unable to provide legal, tax or financial advice, but generally speaking, one should register the business where it is physically located. However, in cases where one is selling through platforms like Amazon or eBay, they generally form in Wyoming, Delaware or Nevada because they like the benefits of being filed in that state, such as no state taxes, no physical business location required, etc. As I cannot speak to your specific situation, I hope this information does help you and if you have any further questions, please do not hesitate to reach out to my team at (888) 449-2638. Amanda, one of my Business Filing Experts, would be more than willing to further assist if needed. Thanks again!
Hi Nellie,
Please correct me if I’m wrong. Im a freelance graphic designer, formed a corporation in California. There’s a good possibility to move in to Henderson NV. I perform all my work online, and have clients all over the country. In this case, I don’t need to file a foreign qualification since I’m not physically meeting with clients in another state, plus I dont have physical location anyways.
Hi Beto,
Thanks so much for reading and commenting. As you probably know, I am unable to provide any legal, tax or financial advice. However, Foreign Qualifications are typically required when an entity is operating in another state with a physical location or employee in that state. Should you need further information, please feel free to call Amanda in my office at (888) 449-2638. Thanks so much and we look forward to hearing from you!
Hi Nellie! I have an online embroidery and sewing business. I am a Florida resident (husband is military) and we are currently stationed in RI. I currently operate as a sole proprietor. I would like to register my business in Florida so that I am not having to register in each state that we move to. Should I create and operate as an LLC instead or can I register the business still as a sole proprietor in FL? If I understand correctly, I then would only need a sales tax permit in the state I currently live in so that I can file sales tax correctly when I make sales within the state. Would I still file a sales tax report in Florida too?
Amy
Hi Amy,
Thanks so much for reading and commenting. As you probably know, I am unable to give tax advice so I would be unable to speak to your specific situation. However generally speaking, a sales tax permit is required in the state where one is physically selling products. The difference between opening and operating as an LLC or a Sole Proprietorship is something I am also not able to give you advice on. However, Talia in my office would be more than happy to assist in answering general questions or going over the differences between the two entity types. You can reach her at (888) 449-2638 ext 109. Thanks so much and we look forward to hearing from you!
I have registered our professional engineer in several states. Typically, if he stamps drawings as a sole proprietor he’s fine, but if he does it for the company, the company is required by that state’s Board of Engineers to have the company registered. The company can only be registered in state or as a foreign entity. We do all our business from another state and never step foot in that state nor to we qualify as “doing business” in that state. If we register for our COA they make us register with the SOS thus creating a tax situation which is hairy and unnecessary since the SOS says we don’t need to pay taxes. What do we do now? Do we just NOT register for the COA since we aren’t the company with nexus or doing business in that state?
Hi Carmen! Thank you for reading my post and for your inquiry. In response this is a question that should be directed to your CPA or financial advisor as I’m not in a position to provide you with tax legal or financial advice. Should you have any further questions you can reach out to her office direct at 1-888-449-2638 and ask for a free business consultation with one of our business experts.
I have an LLC in South Dakota, but we are working 100% of the time in ND. We have registered our LLC in the state of ND. We have employees that come from all over the US, but they work in the state of ND. We are set up to pay all taxes in ND because that is where we are working, so all our workers have ND taxes taken out of their checks. Is this the correct way to do it?
Hello Ann,
Thanks so much for reading and commenting. As you know, I am unable to give any legal, tax or financial advice so would be unable to speak to your specific situation. However, the general rule of thumb is to register where the business is physically located, conducting business and/or has employees. I hope this helps answer your question and if you need any further assistance, please feel free to reach out to Amanda in my office at (888) 449-2638 or email at info at corpnet dot com. Thanks again and have a great day!
If an Oregon LLC has an employee who moves to South Carolina for personal reasons and remains an employee of the LLC while living in SC (working remotely), does the LLC need to register in South Carolina? The LLC is not doing business in SC — it just has the one employee working remotely there.
Hi RJM,
Thanks so much for reading and commenting. As you know, I am unable to provide any legal, tax or financial advice. However, I would be more than happy to give you general information on the topic. The general rule of thumb is to register a business where it is physically located, conducting business and/or has employees. Generally speaking, when a company has an employee working out of another state, the business must also be registered there in order for both the employee and the employer to pay the proper taxes. I hope this helps answer your questions, but please feel free to reach out to Milton in my office at (888) 449-2638 or email info at corpnet dot com if you need any further assistance. Thanks again and have a great day!
I lived in Ohio where my wife and I started contacting sign language interpreters to provide services for the deaf. The business, or school, pays us, and we pay the interpreters. We now live in Florida, but our business continues to expand by contracting interpreters to provide sign language services to our business clients in Ohio. We do not have employees. We only contract the work out. I’m a little confused as to what licensing I need and in what state. Thank you for your time!
Hi Rusty,
Thank you so much for reading and commenting. As you know, I am unable to provide any legal, tax or financial advice. However, generally the business is filed where it is physically located or conducting business. In a situation like yours, determining what licenses are required and where can be tricky. We have a product that searches what licenses are required based on business location and activity, but we wouldn’t want to double charge you. If you choose to do the research on your own, you would need to contact the appropriate government agencies in the area in which you are conducting business. For more information, please call Milton in our office at (888) 449-2638. Thanks so much and we look forward to hearing from you!
Hi Nellie,
We have an LLC here in Texas for our contracting company. We work with a design company who pays our company in our state. They have recently asked us to do work in 3 surrounding states.
Do I need to register with these other states to work there? We will not be meeting any clients, just completing the needed work.
Thank you
Heidi P.
Hi Heidi,
Thanks so much for reading and commenting. As you know, I am unable to provide any legal, tax or financial advice. However, the general rule of thumb is to file the company in the state where business is being conducted, there is a physical location, or there are employees. I hope this helps answer your questions, but please do not hesitate to reach out to Milton in our office at (888) 449-2638 if you have any further questions. Thanks again and we look forward to hearing from you!
Hello,
I will conduct my work from home, in europe but incorporate in Wyoming an LLC. My various clients are in UK, Ireland and USA and I perform works from them remotely. I , sometimes travel to the US to meet my clients for brief meetings of a few days.
Do I have to foreign qualify for the US states where my clients are?
Hi John,
Thanks so much for reading and commenting. I am unable to provide any legal, tax or financial advice so I would be unable to speak to your specific situation. However, generally speaking, one should start a business in the state where they are physically conducting business. When business is mainly being conducted overseas or online, a lot of our clients choose to incorporate in either Wyoming, Delaware, or Nevada for they could have some benefits. I always recommend speaking with a CPA or attorney when deciding which state to form in, but you are also always more than welcome to reach out to Amanda in my office at (888) 449-2638 ext 105 for some more general information. Thanks so much and we look forward to hearing from you!
What do I do if I live in Washington dc but want to start a business in north carolina
Hi Caleb,
Thank you so much for reading and commenting. As you know, I am unable to provide any legal, tax or financial advice so am unable to speak to your specific situation. However, the general rule of thumb is to form in the state where the business is physically located or business will be conducted. When deciding what state to form in, if you are ever unsure, we always recommend speaking with a CPA or accountant as they can give more specific advice. Once you are decided on what state you want to form in, give Amanda a call at (888) 449-2638 and she would be more than happy to answer any general questions you may have or get the process started on your LLC or Corporation!
Hi,
I was advised by a partner to register the LLC in NJ and have the business physical address in Texas where I live. It’s not a store address, just my home address since my business is online. Will I need the foreign qualification for this? And if I do, when will I need that?
Thanks!
Hello Sheena,
Thank you so much for reading and commenting. As you know, I can’t give any legal, tax or financial advice and would therefore, be unable to speak to your specific situation. However generally speaking, a business is best registered in the state where it is physically located. If it is registered in one state, but conducting business in another, the state where business is being conducted can force this company to foreign qualify. To avoid any penalties, foreign qualifications are generally done as soon as business begins in any state. I hope this helps with your inquiry but if you have any further questions, please feel free to reach out to Amanda in my office at (888) 449-2638 and she would be more than happy to assist as much as she can. Thanks again and we look forward to hearing from you!
What if you have been paying taxes and employees in a state that your business is not registered in with the Secretary of State. All work is done remotely with only one employee actually residing in the other state. If all income and unemployment taxes are being paid, what would be the reason for registering with the SoS?
Hi Denisse,
Thanks so much for reading and commenting. As you know, I cannot give legal, tax, or financial advice so am unable to speak to your specific situation. However, I would be more than happy to provide general information. There are many benefits to registering a business with the Secretary of State, other than making paying taxes easier. When an LLC or Corporation is registered with the state, it also protects the name so it can’t be used in the state and it provides liability protection for the owners personal assets. To get some more information on this, please reach out to Amanda Nunez in our office at (888) 449-2638 ext 111. Thanks again and we look forward to hearing from you!
Hi. Is it legal to live in one state and have my business registered in another sate? For example i live New York and i have a DBA registered in Florida. Is it legal?
Hi Dee,
Thank you so much for reading and commenting. As you know, I am unable to provide any legal, tax or financial advice so am unable to speak to your specific situation. However, I would be more than happy to provide you with some general information on the topic! The general rule of thumb when forming a business is to file in the state where the business will be physically located. If the business is filed in one state and is conducting business at a location in another state, the state where the business is not filed may require a foreign qualification in order to collect taxes or fees. For further information on foreign qualifying, please give Amanda Beren in our office a call at (888) 449-2638 ext 105 and she would be more than happy to assist. Thanks again and we look forward to hearing from you!
Hi I have a S-Corp registered in the state of Illinois and we are registered in numerous other states. I am trying to find out if we need to have a foreign representative in the other states or only certain states. if only certain states is there a way to find out which states those are?
Hi Kris,
Thanks so much for reading and commenting. As you know, I am unable to provide any legal, tax or financial advice and would therefore, be unable to speak to your specific situation. However, I would be more than happy to give you general information and help out as much as I can. Please give Diana in my office a call at (888) 449-2638 ext 109 so we can get some more information from you and assist in your inquiry. Thanks again and we look forward to hearing from you!
Hi,
Thanks for the article. This is difficult because everything is so virtual nowadays. I started my travel agency in MI, we’ve moved quite a bit. Now we are in Texas and the Foreign registration is $700 vs starting new is $300. I want to keep everything in MI because I may end up back that way renewal is cheaper and I don’t want o make changes. I also want to expand to a virtual staffing agency.
HI Shante:
Thank you for reading my article. I am glad you found it informative. In response to your inquiry: Generally speaking, if one has an established entity in State X and continues to keep that entity in State X and conduct business in State X but has moved to State Y and will be conducting business in State Y under, then one generally has two options: 1. either foreign qualifying the business in state Y or starting a new entity in state Y; Based on your intent of wanting to keep everything in state X and moving back to State X, then you may want to consider talking to your tax consultant and seeing if it would be ok for you to just start a new entity in State Y since it will be temporary. I hope that helps!
Hi Nellie, thanks for the great article. We have an office (and business license) in Chicago. We pay a person (“Person A”) who lives in New York (NY) to refer NY customers to our Chicago office. “Person A” finds NY people who may be interested in our company’s services and then recommends that these NY people ring our Chicago office phone number, the Chicago office then takes the call and tries to sign-up the NY person that is interested in our services. Would our company need to obtain a business license in NY? We were thinking that the actual business transaction takes place in Chicago and not in NY, hence we don’t need to foreign qualify in NY and get a NY business license, is this correct?. The only activity that is occurring in NY is client “referrals”. Look forward to your reply. Many thanks. Regards, Rod.
Hi Rod – Thanks for reading and commenting. I have a few questions for you before I can share some info: How are you paying the person in NY who is sending you the referrals? Is he an employee?
Hi,
If a business owner has a Corporation formed in Delaware with a Delaware address, but lives in another state like NY, and works remotely from his home/office, is also an employee of the company, and has clients all over the country, does he still need to file a Foreign Qualification for that case?
Thank you for your response.
HI Chrissy:
If your company is incorporated in a particular state, but is conducting business in a state other than the state of formation, the state where the business transactions are taking place will require you to qualify your Corporation or Limited Liability Company (LLC) within the state where the business is being conducted by filing a Certificate of Authority (sometimes also referred to as a Statement & Designation by a Foreign Corporation) with that particular Secretary of State’s office.
Some of the benefits of foreign qualifying your Corporation or Limited Liability Company (LLC) are as follows:
– Your business is formed in a state that is outside of where it is physically located.
– You are able to do business in multiple States.
– You can open a bank account in the state you are doing business within.
Ok, I live in Texas for right now. My wife just started her 2 year residency at the Houston VA hospital. We are moving to Ohio as soon as her residency is finished, I am wanting to start a company when we get to Ohio. Instead of waiting, can I go ahead and file paperwork for the corporation in Ohio? My partner actually lives in Ohio and so do all of the initial employees. All business will be transacted over the internet and our processing/shipping center will be in Ohio as well. Any help with this would be appreciated.
HI Robert:
Thank you for your inquiry. Generally speaking as long as a business is being operated within the state that one is planning to conduct business within and a business partner and the physical location will be within that state, then one can set up the corporation or LLC as soon as they would like. I hope that helps!
I have started an LLC commercial dive company in Florida. A lot of business comes when hurricanes roll through the Gulf coast states. In order to do jobs in those state and get federal jobs in those state would I have to file a foreign qualification in each state?
I have set up a sole proprietor LLC business in Michigan to do consulting services. I would travel to other states in person to provide consulting services, but some of the work may also be done from my home. My first out-of-home-state work would likely be California. Is this a situation that requires foreign qualification? Similarly, would a paid speaking engagement in another state require foreign qualification?
Thanks.
If I am based out of Florida as a C Corp and my business is a Waterless Mobile Detail Service which we only provide a service and not sell products but I expand with 1-2 employees in New Mexico, do I have to register in that state? There is no physical address as it is almost similar to an Uber concept. Please help!
Hello,
My LLC is registered in Oklahoma. I run a trucking conpany and I will start transporting from Mexico to California. Do I have to register in California? Thank you
Hi! We currently have an LLC in California, but would like to move it to Idaho. We will not be making any money for the LLC in 2020, so we’d like to move it to Idaho to avoid paying the $800 required in CA. What is the process to do this? Do we open an LLC in CA first, or transfer, or close the one in CA? Thanks!
I have an LLC in Florida and I have a small business federal government contract with the Army in Aberdeen MD. The place of business is Florida. I am using a consultant who lives in California, has many clients, and works from his home. I pay the consultant on a 1099. Do I have to file a Foreign Qualification to do business in California because I have a consultant there? I don’t sell anything in CA or derive any revenue in CA.
Thanks, ed g
Generally speaking, one will need to foreign qualify in another state if they have employees within that state that they are paying through payroll or are charging sales tax. I hope this answers your question. I would still have you consult with a tax or legal professional to be safe. Best of luck!
Hi Nellie I’m starting a mobile sign business in SC. Do you think I’d need a license for every state I would do business in?
Hi Craig – Generally speaking, you would need to register in any state that you will be having employees, or charging a sales tax. If you’d like to chat, feel free to email me anytime at info at CorpNet dot com
If I use a 3rd party prep service in a different state, but do not own the warehouse and the prepper is not my worker, but a 3rd party service provider, do I need to register my business in that state?
Hi Eve – Thanks for reading and commenting. In response to your post – the question becomes, where is the transaction taking place? Will there be an exchange of money taking place in that other state? Also is the third party offering their services to other businesses as well or only you? Feel free to email me directly to discuss! info at corpnet dot com – Nellie
Hello I have a question I am starting me a box truck business I live in GA but I will be taking loads to different states and sometimes bringing loads back to ga to keep my truck full and running and making money if my home state is GA will I need to file foreign in each 48 states or can my LLC be used to be able to legally drive and take loads back and fourth from different states
Generally speaking if one transacts business in multiple states, the home state will need to register to conduct business in those other states that they are transacting business within. If you would like to chat further, please reach out to: info at corpnet dot com
Hi
If I have a single member PLLC in North Carolina that has a registered business address in NC, but I will be relocating to Ohio where I plan on doing business there but would also like to continue servicing clients in NC, do I need a foreign qualification (registering of my business in Ohio)?
*Majority of my clients can be serviced online but I anticipate the need for in-person meetings depending on the client’s needs or preferences in both states.
Generally speaking if a business starts to transact business in another state other than their home state, the home state will need to register to conduct business in those other states that they are transacting business within. If you would like to chat further, please reach out to: info at corpnet dot com
Hi. Just wanted to ask something. I’m about to start a home based business in my state. The business does not involve any traveling and clients are to be helped through online meetings. I will be conducting business in my home. Can I register in another state since I am doing an online business? They are saying that Delaware is a good place to register a business. Please advise and thank you so much.
Hi Ruth – thank you for the great question! There are many things to consider when choosing a state to register in. In general, for a small corporation with less than 5 shareholders, it is often best to incorporate in the state where the business will have a physical presence. In other words, incorporate a business in the state where you will have an office (including a home-based business) salespeople, and/or employees. If you would like to chat further you can email me directly at info at corpnet dot com.
I have 2 questions
1st question, would like to setup a stock investing LLC with my own funds, won’t have a physical office because all trading is online, do I need to register in the state where I recide?
2nd question, would like to setup a Holding Company LLC to hold the fits investment company and expand to other ventures later. Since the Holding company doesn’t manufacture anything, sell any products or services, or conduct any other business operations. Can this entity be setup in another state and does it need to register as a foreign entity in Massachusetts
Hi Connor – Great questions! Generally, for a small corporation with less than 5 shareholders, it is often best to incorporate in the state where the business will have a physical presence. In other words, incorporate a business in the state where you will have an office (including a home-based business) salespeople, and/or employees. If you would like to chat further you can email me directly at info at corpnet dot com.
Hi there, and many thanks for all the knowledge! ; )
I have a farm in Vermont where I live during the summers, growing herbs that eventually go into topical products. Because my folks are mostly in PA, I’m also down there quite a bit. I need to create an LLC in either VT or PA that will allow me to obtain an EIN, and then GS1 barcodes to put on our product packaging. I would like to incorporate in VT, since this is where the farm associated with the products is, and since all things LLC are much easier to manage than in PA.
So, and here’s the basic question i have for you- if i open the LLC in VT, and produce my products there, can I also sell them in stores located in the tri-state area without needing to start a foreign LLC in those states? If products associated with my VT LLC are, lets say, selling in food stores in Vermont, AND I also have them in stores in PA and NJ and wherever else I can get them into, does that require me to have a foreign LLC in those states, or any other states that my products are sold in? Even when the retail locations they’re stocked in are obviously some one else’s, like co-ops, body care shops etc.?
So again, if i have an LLC in VT, and make products, do i need to have a foreign LLC in every state that i hope to sell my products in? Or, is this only if I have personal business or retail locations belonging to me in other states?
Hope that question was clear, and many many thanks for any advice on that matter you might have.
take care
Hi Jim – Thanks for reaching out! Generally speaking, if a business is incorporated in one state or set up as an LLC in one state and decides to sell in other states, a foreign qualification will be required. I hope that’s helpful. If you would like to connect and chat further about this, feel free to email me directly at info at corpnet dot com.
Thanks!
Hi, Nellie,
My company was incorporated in NY and our customer head office is In NY too. We provide professional services to this customer’s Project in California. Do we need register in CA and report revenue to CA? Thank you very much!
Hi Kenmei – Generally speaking, if a company engages in any other state where there is revenues generated, employees or transaction, the state in which business is being conducted will required that business to foreign qualify within that state. If you would like to chat further, feel free to email my team at info at corpnet dot com
So let’s say a client who I’m doing business for lives in the same state as my business but wants me to do work on their other property in another state, do I have to register as a foreign entity then?