Often business owners decide to form their limited liability company (LLC) in one state, but either entirely transact business in or expand their business to another state. In this case, you’ll need to register your LLC in the new state as a “foreign” entity type.
The specific requirements to register a foreign LLC differ from state to state. Nonetheless, the procedural steps are simple.
What is a foreign limited liability company (LLC)?
A foreign LLC is an LLC that has registered to do business in a state other than the one in which it was originally formed. “Foreign” doesn’t mean that the entity was formed in another country. It merely means that the business entity was formed in another state and is a foreign entity to the new state.
When an LLC begins to conduct business in a state other than the one in which it was formed, it will be required to register there.
How to register a foreign LLC
To register your LLC as a foreign LLC in another state, you must file specific documents and pay state fees.
The procedural steps to register a foreign LLC in a state are similar to LLC formation in your home state. However, legally the two are very different. Registering an LLC as a foreign LLC in a new state doesn’t create a new entity. There’s still only one LLC legally existing in and under the laws of the state in which it was formed. The LLC has merely put the new state on notice that it has entered the new state to do business and, more importantly to the new state, pay local LLC taxes.
Registering your LLC as a foreign LLC in a new state means that the LLC will be responsible for annual filings (such as an annual report) and paying certain fees/taxes in both states.
Steps to register a foreign LLC:
- Step 1: Verify business name availability
- Step 2: Appoint a local registered agent
- Step 3: Obtain a certificate of good standing from your home state
- Step 4: Prepare and file a “Certificate of Authority”
- Step 5: File the registration documents with the secretary of state and pay state fees
- Step 6: Complete registrations with local tax and licensing authorities
1. Verify business name availability
To avoid confusing consumers, the company name of your LLC must be distinguishable from those held by other entities.To verify that, do a name search on the local Secretary of State website. If the name is available, most states have a name reservation service that allows you to hold the name until you have filed all your documents.
If your legal company name is not available, then you’ll have to file for a “doing business as” name. Then use it to operate in the state.
2. Appoint a local registered agent
The purpose of a registered agent is to receive important mail from the state or legal documents on behalf of the LLC.
In most states, you can be your own registered agent if you have a physical address in the state (P.O. boxes are not accepted). But that’s often not the case for foreign LLCs.
Due to the above and privacy reasons, many businesses prefer to use a professional service instead. Thus, the principal office of the LLC will be different from the registered office for purposes of service of process.
3. Obtain a certificate of good standing from your home state
The new state in which you register your foreign LLC will want a certified copy of a Certificate of Good Standing from the state where the LLC was formed. This is a condition of registration.
A Certificate of Good Standing means that you have filed all required documents and paid all required fees in your home state. The fees for this document vary from state to state.
Some states may also want a copy of the LLC’s original Articles of Organization in the state where the LLC was originally formed. So be sure to request one.
4. Prepare and file a “Certificate of Authority”
Each state has a particular form that needs to be filed along with a fee to register the foreign LLC in their state. In some states, it’s called a “Certificate of Authority.” In others, it can be called:
- Application for Authorization
- Certificate of Existence
- Certificate of Foreign Registration
In every case, this document serves the same purpose. It notifies the local Secretary of State about your registration request.
Typically, this form will ask you to provide the following details:
- The legal name of your LLC
- Fictitious or assumed name (if required)
- In-state mailing address or city/county where you plan to operate
- Company office address in the home state
- Registered agent details
5. File the registration documents with the secretary of state and pay state fees
Once the proper forms have been obtained and completed, file them along with a cover letter and the fee with the new state’s secretary of state (or it may be a Division of Corporations, etc.). Once the approval is granted, you can legally begin operations.
6. Complete registrations with local tax and licensing authorities
Once your foreign LLC registration has been filed and accepted by the new state, you’ll also want to register with various state licensing and tax authorities, depending on the nature of your business.
For example, you may want to register with the state to pay sales/use taxes or the state franchise tax.
Also, you may be required to obtain a state license to operate certain businesses, such as a salon or real estate brokerage office.
You may also want to set up a new bank account in the new state for the LLC using the new business address.
Foreign LLC registration fees in every state
Below are the foreign LLC filing fees and links to the registration documents in each state.
This material is provided for informational purposes only. The provision of this material does not create an attorney-client relationship between Paul Donovan and/or Donovan Legal PLLC and the reader and does not constitute legal advice. Legal advice must be tailored to the specific circumstances of each case, and the contents of this article are not a substitute for legal counsel. Do not take action in reliance on the contents of this material without seeking the advice of counsel.
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