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When should you register as LLC in a different state?
When you do business nowadays, you will often come across the need to go beyond the borders of your state. In other words, you will come across the need to conduct business in multiple states at the same time. This is where you will wonder whether it is required for you to register your business in a different state before you start your operations or not. Continue to read this article and we will be sharing more details about it with you.
What is a foreign LLC qualification?
If you are doing business in a different state apart from the state where you registered the business, you will need to register your business in the new state as well. The process of registering your business like this is called the foreign qualification. There are some questions that you need to ask yourself before you try to obtain a foreign qualification. They include:
- Whether your corporation or LLC has a physical presence within the state
- Whether the majority of your business revenue is generated within the state
- Whether you often have in-person meetings with clients within the state
- Whether you apply for a business license within the state
- Or whether any of the employees that work for your business are in the state
Common examples of foreign qualifications
Below mentioned are some of the best examples of foreign qualifications. Based on that, you can have a better understanding of when to register your business under a different state.
Let us say that you operate a new restaurant in New York, and you wish to expand that to American Samoa. This is where you will need to file for foreign qualifications within Maryland.
In case you incorporated a business in North Carolina, but your business is physically present in South Carolina, you need to get foreign qualifications in South Carolina.
Assume a situation where you live in Indiana, but you have a business partner from Texas. Your business is registered in Indiana as well. However, your business partner from Texas recently started bringing in more leads from Texas. This is where you should foreign qualify your business in Texas.
How to foreign qualify your business
After verifying your situation, you will be able to proceed with foreign qualifications. This is where you should proceed with submitting an application to the office of the secretary of state. The application is usually known as a Certificate of Authority. You will be able to do this on your own. That is because you just need to go through a straightforward paperwork procedure. However, you will need to keep in mind that some of the states will ask you to present a certificate of good stating, obtained from the state where you registered your business. In other words, you need to make sure that you are up to date with your tax filings in the state.
Final words
Expanding and scaling your business to other states ensure that your business can be taken to greater heights with ease. However, you need to make sure that you adhere to the legal obligations while doing this. That is where you should go ahead with obtaining foreign qualifications for your business. If you fail to do this, you will end up paying unnecessary interest and fines. On the other hand, you will also have to pay back taxes for the time duration where you did not properly register your business. There is also a possibility for you to be sued in a state where you are not foreign qualified.
LLC Best State to register a LLC
Register LLC in American Samoa
Setting up a limited liability company (LLC) in American Samoa can help you establish an independent legal entity for conducting business operations and holding cryptocurrencies such as NFTs. LLCs are available in states, territories, and insular areas such as Puerto Rico and American Samoa. Also known as Limited Liability Companies, LLCs are special entities created under state laws that provide liability protection to owners involved in business activities.