Table of Contents
Contrary to the way it sounds, a foreign LLC refers to U.S. companies. “Foreign” is a classification used for companies that do business in states other than the home state where the LLC was organized. A “foreign” designation can be used in the same way for other entity types that are registered with a state, such as corporations and limited partnerships.
States require companies to register as foreign LLCs (and foreign corporations and limited partnerships) to ensure these businesses meet the state’s regulatory and tax requirements. For example, oftentimes foreign LLCs have to follow the same state annual tax and filing requirements that LLCs that were formed in that state must follow.
(For more about these ongoing requirements, see our state guide on LLC tax and filing requirements.)
A “foreign LLC” is an LLC that’s doing business in a state that’s different from where it was formed. A “domestic LLC” is an LLC that’s doing business in the same state where it was formed. You can have both a foreign and a domestic LLC.
For example, suppose you organized your LLC in Michigan and you do business in both Michigan and Indiana. Your LLC would be a domestic LLC in Michigan because that’s where it was formed. Your LLC would also be a foreign LLC in Indiana because it does business in Indiana but was formed in another state, Michigan.
A business can have different reasons for registering its LLC as a foreign LLC. Generally, there are two common reasons a business will register an LLC in another state:
Businesses often expand beyond state borders. For example, a surf shop in Carolina Beach, North Carolina might find it lucrative to open a second shop in Myrtle Beach, South Carolina. In that case, choosing to operate in another state could make financial sense and be a natural next step in the surf shop’s business plan.
Most business owners form their LLCs in their home state. Others, however, never intend to do business in the state where they form their LLCs. Instead, owners choose to organize their LLCs in a state, not because of geography, but because these states are more friendly to LLCs. For instance, some states—like Wyoming and Nevada—have no corporate income tax. Other states have limited regulations on LLCs or laws that are favorable to LLCs.
Because of these tax and regulatory advantages, business owners will simply choose to register their LLCs in a business-friendly state and then operate in the state where they’re physically located. Registering as a foreign LLC was part of their plan all along. (For more information on organizing your LLC in another state, read our article on where to form your LLC.)
If you registered your LLC in one state, and you’re operating your business in other states as well, you’ll likely need to register as a foreign LLC in each of those states where you’re conducting business.
Each state has its own rules as to which types of business activities qualify you as a foreign business. Typically, you’ll be required to register as a foreign LLC if any of the following is true:
Generally, your activities must be regular, repeated, and continuous to require registration. For example, a single, short transaction in a state usually doesn’t require you to register your company as a foreign LLC. Additionally, states have activities that are exempt from registration. So, your business can engage in these exempted activities without needing authority from the state to operate there.
For detailed guidance on when you need to register as a foreign LLC, read our article about qualifying to do business outside your state. For state-specific guidance, check out our state guide to qualifying your foreign business.
In most states, the office of the secretary of state handles applications for foreign registrations, and you should check that state’s requirements. Once you’ve determined that you need to register your company as a foreign LLC, you’ll need to submit the appropriate paperwork to the state. The form is usually called a “certificate of authority,” an “application for authority,” a “foreign registration statement,” or something similar.
The steps and application are similar to those you follow to form your LLC including:
Some states require you to also submit a certificate of good standing from the state where your LLC was formed to show you’re legally authorized to operate in your home state. The document is usually available from the same state office where you filed your LLC registration. You’ll need to be up to date on any required paperwork, fees, and taxes and, usually, pay a small fee, to receive a certificate.
An LLC can face various consequences for doing business in a state where it’s not registered. Generally, if your foreign business isn’t registered, you can’t file or maintain a lawsuit in that state. If you do file a lawsuit in a state where your LLC isn’t qualified, the court can pause your lawsuit until your LLC has properly registered, or dismiss your suit entirely.
Many states charge penalties that can be hefty if you’re operating there without proper registration. Some states charge a flat fine for every month that you’re doing business in the state without authorization.
You also could be required to pay the filing fees, late fees, interest, and penalties for the years you operated your business without authorization. For example, if you started doing business in 2020 but didn’t register until 2022, then you could be responsible for the fees, interest, and penalties for 2020 and 2021.
But some things remain unaffected by foreign registration or the lack of registration For instance, typically the LLC’s contracts and acts aren’t invalidated because the LLC wasn’t registered. Additionally, the LLC members’ limited liability isn’t usually affected. For instance, an LLC member usually won’t be held personally responsible for the LLC’s liabilities and obligations for the sole reason that the LLC didn’t register.
An alternative to qualifying your foreign LLC is forming a new LLC in each state where you want to operate. You’d need to follow the procedures required by the state. But the advantage to forming a new LLC is that if you’re sued or you declare bankruptcy at an operation in one state, your other operations wouldn’t be responsible for that LLC’s debts or liabilities.
The answer is it depends. Just doing a lot of business in another state doesn’t necessarily mean you have to register there. Sometimes, states will require your business to pay sales tax but not require your business to register as a foreign LLC.
Sometimes, online sales in a state aren’t enough to require you to qualify as a foreign LLC. Though every state is different and you should check each relevant state’s foreign LLC laws. However, generally, if you have other operations in tandem with online sales, then you probably need to qualify.
For example, suppose you have an online business in New York selling trading cards and some of your sales come from Pennsylvania. You probably won’t be required to register your business in Pennsylvania because interstate commerce (transactions between states) alone doesn’t necessitate registration. But if you open a warehouse in Pennsylvania to speed shipments to your customers, you probably will have to register as a foreign LLC.
When it comes to foreign LLCs, you’ll need to look at state law and common law (decisions from courts). While there’s plenty of overlap between states, there’s a range of variation between states when it comes to when and how foreign LLCs must register. So, your first step should be to look at the foreign LLC qualification laws for the state where you plan to operate. You should also look at the state government websites—for example, the secretary of state and department of revenue websites—for guidance.
Because there’s so much nuance between states and you often have to look at case law for answers and direction, you should consider talking to a business lawyer. They can provide guidance on when you should register your foreign LLC and the consequences of doing business in a state without registering. An attorney can also complete the application process for you and advise you on your continuing legal obligations as a foreign LLC.
]]>Pennsylvania is no exception. If you formed your company in another state and want to do business in Pennsylvania, you’ll need to follow a procedure to register your foreign (non-Pennsylvania) business. Pennsylvania, unlike other states, doesn’t have laws specific to registering LLCs or corporations. Instead, the Commonwealth has a set of laws that cover the registration of foreign associations (including corporations and LLCs).
(For further guidance, read about qualifying to do business outside your state.)
If you formed your corporation or LLC in another state but intend to transact business in Pennsylvania (called “intrastate business”), then you need to register with the Pennsylvania Department of State (DOS). Your out-of-state corporation or LLC would be considered a foreign corporation or foreign LLC, respectively.
Before registering your corporation or LLC, you need to determine whether registration is necessary in the first place. You must figure out whether your connection with Pennsylvania counts as “doing business” in the state for the purpose of registering your foreign association.
Pennsylvania’s association laws don’t directly define what’s considered “doing business” in the state. But the Committee Comments that accompany the law give some insight into what activities count as transacting intrastate business. The Committee Comments are prepared by the Pennsylvania Bar Association’s Business Association Committee. These comments clarify and expand upon the content of the laws and are accepted as part of the legislative history.
The Committee defines “doing business” for the purpose of registering a foreign association as involving:
The Committee also provides examples of activities that do count as doing business and would require a foreign corporation or LLC to register. These activities include:
The Committee does clarify that if a foreign business purchases personal property to ship out of Pennsylvania in interstate commerce, that business isn’t required to register.
(15 Pa. Cons. Stat. § 403 (2023).)
Like other states’ laws, Pennsylvania law excludes some activities from being considered intrastate business that requires foreign registration. In other words, a foreign corporation or LLC that takes part in only these activities wouldn’t need to register with the DOS. The exempted activities include:
(15 Pa. Cons. Stat. § 403 (2023).)
To register to do business in Pennsylvania, a corporation or LLC must submit a signed foreign registration statement to the DOS.
The statement must include the following:
(15 Pa. Cons. Stat. § 412 (2023).)
You can download the foreign registration statement to complete and mail to the DOS’s Bureau of Corporations and Charitable Organizations. You can also file the statement online with the Pennsylvania Business Filing Services. As of 2023, the filing fee is $250.
Specific foreign LLC requirements. The registration statement also asks LLCs whether the company will provide professional services. These professional services are listed on the statement. If your company will provide one of those services, you’ll need to check off which one.
Specific foreign corporation requirements. A foreign corporation must publish either its intention to register or its registration to do business in Pennsylvania in two newspapers. The publication should include:
The corporation doesn’t have to send proof of the publication to the DOS but should store the record with the minutes of the corporation. (15 Pa. Cons. Stat. § 6124 (2023).)
Pennsylvania’s law on the effects of not registering your foreign business is very similar to the laws of other states. Specifically, like with other states, if you don’t register your foreign business in Pennsylvania, then you can’t file or maintain a lawsuit in Pennsylvania courts.
Also, as is similar to other states, some things aren’t affected by a business’s failure to register. For instance:
(15 Pa. Cons. Stat. § 411 (2023).)
After you register your foreign corporation or LLC, your obligations and responsibilities don’t end. You need to maintain your foreign business registration. You might need to file an annual report. You could also be responsible for paying and reporting business taxes. The Pennsylvania governor and Secretary of Revenue released the publication Starting a Business in Pennsylvania: A Guide to Pennsylvania Taxes, which breaks down various business tax requirements and provides instructions for how to register for taxes with the Department of Revenue.
You can likely register your foreign business on your own. But if you have questions about whether your business needs to register or the obligations of your company, consider talking to a Pennsylvania business attorney.
For more on maintaining your business registration, check out our article on LLC annual report and tax filing requirements in Pennsylvania.
]]>As is the case with other states, if your business starts operating in Florida, then you must apply for authorization as a foreign entity. If you want more general guidance on foreign registration that’s not specific to Florida, read our article on qualifying to do business outside your state.
Florida requires companies that transact business within the state (or conduct intrastate commerce) to register as a foreign entity. Typically, LLCs will register as foreign LLCs and corporations will register as foreign corporations.
Florida, like many other states, provides little instruction about what’s considered “transacting business” for the purposes of qualifying as a foreign company. Generally, if your out-of-state company has a business connection in Florida, it qualifies as transacting business. The Florida Department of Revenue provides several examples of which activities create a business connection, including:
These activities are just examples of when a business is typically considered as “doing business” in Florida. In addition, companies that collect sales tax in Florida are usually required to register as foreign entities.
You can find more information about which activities require foreign registration by looking at the activities that don’t require registration (as discussed in the next section).
Sometimes it’s relatively obvious to conclude when your company “transacts business” in Florida. But other times, it’s helpful to get an experienced legal opinion. So if you’re unsure about whether you should register as a foreign LLC or corporation, you should speak with a Florida business lawyer. They can help you figure out whether the types of transactions and level of operations your business engages in within Florida require registration.
In Florida, you don’t have to register your foreign business if your company is engaged in certain types of activities. Florida law lists these exempted activities:
This list of activities isn’t meant to be exclusive and other activities might be exempt. (Fla. Stat. § 605.0905 (2023); Fla. Stat. § 607.1501 (2023).)
If you must register your foreign business in Florida, you need to file an application to transact business with the Florida Department of State (DOS). You can download a copy of the application form from the DOS website to complete and mail it to the DOS’s Division of Corporations. The applications for foreign corporations and LLCs are very similar.
For corporations and LLCs, the application for authority must include the following information:
To register your foreign corporation, you’ll also need to provide:
To register your foreign LLC, you’ll need to give the name, title, and address of at least one person who has the authority to manage the LLC.
Along with your application to register your foreign corporation or LLC, you’ll need to submit a certificate of existence or a similar record issued by your home state’s secretary of state that’s not more than 90 days old.
(Fla. Stat. § 607.1503 (2023); Fla. Stat. § 605.0902 (2023).)
Foreign corporations. You can find the Application by Foreign Corporation for Authorization to Transact Business in Florida listed as “Profit Qualification” under the corporations forms section of the DOS website. The downloadable form includes the application, instructions, and cover letter. As of 2023, the filing fee is $70.
Foreign LLCs. You can find the Application by Foreign LLC for Authorization to Transact Business in Florida listed as “Qualification of Foreign LLC” under the LLC forms section of the DOS website. The downloadable form includes the application, instructions, and cover letter. As of 2023, the filing fee is $125.
If your LLC transacts business in Florida without authority, it can’t file a lawsuit in the state. In addition, your LLC will be liable for all fees and penalties it should’ve paid if it had properly registered, plus a civil penalty of between $500 and $1,000 for each year your LLC transacted business without a certificate of authority.
However, not being registered doesn’t invalidate your LLC’s contracts or prevent your LLC from defending a lawsuit in Florida. Also, a member or manager of the LLC isn’t liable for the LLC’s debts, obligations, or other liabilities solely because the company transacted business in Florida without a certificate of authority.
(Fla. Stat. § 605.09024 (2023).)
To legally transact business in another state, you need to register your business and maintain that registration. Florida requires corporations and LLCs, both domestic and foreign, to file annual reports. You might also be responsible for paying and reporting some business taxes. For more information, read about Florida LLC annual report and tax filing requirements.
For more specific legal questions, consider speaking with a business attorney in Florida. They can help you register your business and avoid penalties associated with doing business without a certificate of authority.
]]>Before you register your business, you need to know whether you need to qualify as a foreign entity in the first place. Learn whether your company needs to apply to transact business in Maryland, the forms you need to file, and the consequences of not registering. (For more general information, read our article about qualifying to do business outside your state.)
If you’re doing “intrastate business” (business within the state) in Maryland as a non-Maryland entity, you must register your company with the Maryland Department of Assessments and Taxation (SDAT). Specifically, you must register:
Maryland law, like with many other states, doesn’t clearly define what counts as “doing business.” However, Maryland does specify one activity as doing business in the state. If your foreign LLC owns income-producing real or tangible personal property in the state, then your LLC is considered to be doing business in Maryland. (Md. Code Corps. & Ass'ns § 4A-1009 (2023).)
Apart from this one activity, you’ll need to look at case law to determine whether particular business activities are considered “doing business” for the purposes of qualifying as a foreign corporation or LLC. For example, the courts have said that a foreign corporation does business in Maryland “when it transacts some substantial part of its ordinary business” within the state. (Tiller Const. Corp. v. Nadler, 334 Md. 1, 10 (1994).)
Perhaps the most helpful instruction on what counts as doing business comes from a 2017 court case. In that case, the court considered four factors:
(Willow Grove Citizens Ass'n v. Cnty. Council of Prince George's Cnty., 235 Md. App. 162, 172 (2017).)
Talking to a Maryland business lawyer can also help you decide whether your business should register as a foreign LLC or corporation. An attorney can give helpful advice about whether your company should register and the potential risks of doing business in Maryland without registering.
In Maryland, some activities are specifically excluded from being classified as “intrastate business.” If your company participates in only these listed activities, then it doesn’t have to register as a foreign business.
For both foreign corporations and LLCs, these activities—as laid out in the Maryland General Corporation Law and LLC Act—include:
(Md. Code Corps. & Ass'ns §§ 7-103 and following (2023); Md. Code Corps. & Ass'ns § 4A-1009 (2023).)
Additionally, Maryland General Corporation Law lists two additional activities that don’t constitute transacting intrastate business for corporations:
(Md. Code Corps. & Ass'ns § 7-104 (2023).)
Moreover, if your company participates only in foreign or interstate commerce, it’s not considered to be “doing business” in Maryland for the purposes of qualifying as a foreign LLC or corporation.
If you need to register your LLC or corporation as a foreign business, you’ll need to file an application with the SDAT. In addition to filing your application, you must provide the SDAT with a certificate of good standing or similar document from your home state that’s been issued within the last 60 days.
You can mail your completed application and certificate to the Charter Division of the SDAT or file online using Maryland Business Express. As of 2023, the filing fee for both corporations and LLCs is $100.
The application requirements for foreign corporations and LLCs are a little different.
To qualify to do business as a foreign corporation in Maryland, you’ll need to certify to the SDAT:
(Md. Code Corps. & Ass'ns § 7-203 (2023).)
You can download and complete the foreign corporation qualification form provided by the SDAT. The form also asks you to provide:
If you indicate in your filing that you did previously do business in the state without registering, you must include a $200 penalty (in addition to the $100 filing fee) with your registration in order for it to be processed.
If you want to register your foreign LLC with Maryland, you must provide:
(Md. Code Corps. & Ass'ns § 4A-1002 (2023).)
You can download and complete the LLC registration form provided by the SDAT. If you indicated in your application that your LLC has previously done business in Maryland without authorization, then you’ll need to also include a $200 penalty with the registration form.
Under Maryland law, foreign LLCs and corporations that haven’t registered to do business in the state can’t file or maintain a lawsuit in Maryland unless:
But the business can still defend against a lawsuit or proceeding in Maryland even when not registered to do business in the state.
Penalties on the business. In addition, the SDAT can impose a $200 penalty on unregistered or unqualified foreign LLCs and corporations.
Penalties on corporate officers and LLC members. Officers of foreign corporations and members of foreign LLCs that do business in the state without registering are guilty of a misdemeanor. If convicted, they could have to pay a fine of up to $1,000.
Effect on contracts. If a corporation or LLC fails to register as a foreign business, any contracts they entered into won’t be affected. These contracts will remain valid and enforceable unless something else invalidates them.
(Md. Code Corps. & Ass'ns §§ 7-301 and following (2023); Md. Code Corps. & Ass'ns § 4A-1007 (2023).)
After registering your foreign business, don’t forget to keep up with the continuing registration and tax requirements to keep your foreign LLC or corporation active and in good standing. For more on these requirements for LLCs, check out our article on LLC annual report and tax filing requirements.
Maryland’s business laws can have many specifications and exceptions. If you need legal advice about non-Maryland businesses and the laws that govern them, consider talking to a business attorney.
For more guidance, read the Maryland Attorney General’s Guide to Legal Aspects of Doing Business in Maryland. You can find information on how to register as a foreign LLC or corporation. You can also learn more about Maryland taxation, labor and employment law, business assistance and financing programs, and more state business topics.
The Comptroller of Maryland also provides a Starting a New Business in Maryland webpage with links to helpful resources. Maryland also has a Business FAQ page on the Business Express website.
]]>If you have a corporation or limited liability company (LLC) that was formed outside of New Jersey but you plan to operate within New Jersey, you might need to qualify as either a:
New Jersey laws for foreign (out-of-state) corporations and LLCs are similar to those of other states. If you want more information that’s not specific to New Jersey, you can read our article on how to qualify to do business outside of your state.
Before doing business in the state, Massachusetts requires foreign corporations and LLCs to obtain a certificate of authority to transact business. While “doing business” isn’t defined under New Jersey law, the state government provides guidance on which activities require out-of-state businesses to register.
If you have operations in New Jersey (that aren’t exempt) or want to contract with the New Jersey government—including state, county, and municipal governments as well as school districts—then you’ll need to apply for a certificate of authority.
New Jersey calls out-of-state businesses with operations in New Jersey nexus businesses because they have a nexus (a connection or link) in the state. The following are considered business operations that require a certificate of authority:
New Jersey specifies some activities that don’t require you to obtain a certificate of authority. Instead, if any of these specified activities apply to your business, you only have to register for state taxes. These activities include:
It’s important to note that you only need to register for taxes if your transactions either are greater than $100,000 or number more than 200 within the calendar year. But if you have operations or contracts with the state in addition to these activities, you’ll need to obtain a certificate of authority.
For more detailed information, visit New Jersey’s out-of-state business registration webpage. You can also receive help from the state Division of Taxation’s Nexis Unit - Office Audit Branch.
Massachusetts law provides a list of activities that don’t require your foreign corporation or LLC to obtain a certificate of authority. These activities differ some between corporations and LLCs.
The list of activities that aren’t considered “doing business” in New Jersey for foreign corporations include:
(N.J. Stat. § 14A:13-3 (2023).)
The list of activities that aren’t considered “doing business” in New Jersey for foreign LLCs include:
(N.J. Stat. § 42:2C-59 (2023).)
Applying to do business in New Jersey as a foreign corporation or LLC requires three steps:
Once you’ve completed these three steps, you should be able to obtain a business registration certificate from the Department of Treasury (DOT) Division of Revenue and Enterprise Services.
To apply for a certificate of authority from the DOT, you’ll need to submit a certificate of good standing from your home state. The certificate of good standing must be dated within 30 days of your application filing date.
When applying for a certificate of authority to transact business, New Jersey law requires corporations to provide the following information:
(N.J. Stat. § 14A:13-4 (2023).)
For foreign LLCs, New Jersey law requires the following information:
(N.J. Stat. § 42:2C-58 (2023).)
You can find more information about getting your business registered on the DOT website.
The consequences of not registering your foreign LLC or corporation are very similar to those of other states. If you do business in New Jersey without a certificate of authority, then you can’t file or maintain a lawsuit in the state. But failing to register doesn’t invalidate your company’s acts or contracts.
Additional considerations for corporations. Foreign corporations that operate without a certificate of authority can be fined between $200 and $1,000 each year it transacts without a certificate. The corporation can be fined for up to five years. (N.J. Stat. § 14A:13-11 (2023).)
Additional considerations for LLCs. If a foreign LLC doesn’t obtain a certificate of authority, then its members and managers aren’t automatically liable for the LLC’s debts, obligations, and other liabilities. In other words, the failure to obtain a certificate by itself doesn’t make the members or managers of the LLC liable. (N.J. Stat. § 42:2C-65 (2023).)
New Jersey has great resources available to businesses that are looking to operate in the state. You can visit the New Jersey business webpage to find information on planning, starting, operating, and growing your business. You can also use the Business Navigator to register your business and receive a personalized step-by-step guide that has information on business licenses, forms, and permits.
Qualifying your foreign business in New Jersey can get confusing. If you need legal advice on whether to register, which forms to file, or how to maintain your foreign registration, speak with a New Jersey business attorney. They can guide you through the process and answer any specific legal questions you have.
]]>Most businesses can figure out the process on their own. But if you have questions about the law or need legal advice about the process, consider reaching out to a business attorney in Massachusetts.
(If you need guidance not specific to Massachusetts, check out our article on qualifying to do business outside your state.)
Massachusetts, like other states, requires any business that’s conducting transactions within the state to register with the Secretary of State (SOS). Activities conducted within the state are considered “intrastate business” or “intrastate commerce” and do require registration. Activities conducted between states are considered “interstate business” or “interstate commerce” and don’t require registration.
If you conduct transactions or operate in Massachusetts, then you’ll likely need to register as either a:
Massachusetts, unlike many states, does specify which activities are classified as “doing business” in the state.
The following activities do qualify as transacting business in Massachusetts and would require foreign registration:
Additionally, if your company has a usual place of business in Massachusetts, then you must register as an out-of-state business. (Mass. Gen. Laws ch. 156D, § 15.01 (2023).)
Generally, if you’re doing intrastate business in Massachusetts, you’ll need to register your company. However, there are exceptions. Massachusetts law provides a list of exempted activities that out-of-state corporations can engage in that don’t require the corporation to register. The list also applies to LLCs. (Mass. Gen. Laws ch. 156C, § 48 (2023).)
The list of activities that aren’t considered “doing business” in Massachusetts includes:
(Mass. Gen. Laws ch. 156D, § 15.01 (2023).)
If your foreign corporation or LLC participates only in these activities, it doesn’t need to register with the SOS. The list isn’t meant to be exhaustive and other activities might qualify as exempt.
A foreign corporation or LLC must file a certificate of registration with the SOS within 10 days after it starts doing business in Massachusetts. Along with your application, you’ll need to submit an authenticated certificate of good standing or certificate of existence issued by your home state.
To register your foreign corporation, you need to file a Foreign Corporation Certificate of Registration. The application must include the following information:
(Mass. Gen. Laws ch. 156D, § 15.03 (2023).)
You can find this certificate along with other forms and instructions on the foreign corporation forms section of the SOS website. As of 2023, the filing fee is $400.
To register your foreign LLC, you need to file a Foreign LLC Application for Registration. In the application for registration, you’ll need to include the following:
(Mass. Gen. Laws ch. 156C, § 48 (2023).)
You can find this certificate along with other forms and instructions in the foreign LLC information section of the SOS website. As of 2023, the filing fee is $500.
If your LLC or corporation does business in Massachusetts without registering, it can’t initiate lawsuits in the state. Your company can, however, be sued and defend against those lawsuits.
Additionally, not being registered doesn’t invalidate your LLC’s or corporation’s contracts or acts. So, any contracts your corporation or LLC entered into would still be enforceable regardless of whether you registered as a foreign business.
(Mass. Gen. Laws ch. 156D, § 15.02 (2023); Mass. Gen. Laws ch. 156C, § 54 (2023).)
If your foreign corporation does business in Massachusetts without first registering, then you’ll be liable for various fines. Specifically, the SOS can require your corporation to pay:
Your corporation isn’t responsible for the monthly penalty for the first 10 days that you transacted business in the state without filing your certificate.
(Mass. Gen. Laws ch. 156D, § 15.02 (2023).)
Massachusetts law says that if your LLC doesn’t register with the SOS, then it can be fined up to $500 for each year that it’s not registered.
However, LLC members and managers aren’t personally responsible for any of the LLC’s obligations solely because the LLC didn’t register.
(Mass. Gen. Laws ch. 156C, § 54 (2023).)
If you’d like more information on registering your foreign LLC or corporation, you can visit the SOS website. You can search or file by subject and learn about the different filing methods. You can also access other services you might need when you start to do business in Massachusetts.
You’ll also be responsible for keeping up with annual filing and tax requirements just as if you registered as a domestic entity with Massachusetts. For more on maintaining your business registration, check out our article on Massachusetts LLC annual report and tax filing requirements.
]]>If you do business in New York but formed your corporation or limited liability company (LLC) in another state, you might—depending on your business activities—need to register as a foreign business with New York. For more general guidance on foreign registration, read our article on qualifying to do business outside your state.
Generally, if a company is engaged in “intrastate commerce” (operations and transactions that take place within the state), then it’s transacting business in New York. But which activities qualify as intrastate commerce? New York law provides little guidance on that question. Additionally, the New York Department of State (DOS) has said that it doesn’t give opinions as to which activities count as doing business in New York for qualification purposes.
To understand when you need to register your foreign LLC or corporation, you must look at case law and what the courts have said on the subject. Previously, the courts have defined “doing business” in New York as activities and conduct that are:
(Commodity Ocean Transp. Corp. of New York v. Royce, 221 A.D.2d 406, 407 (1995); Highfill, Inc. v. Bruce & Iris, Inc., 50 A.D.3d 742, 744 (2008).)
Additionally, if your business reports sales tax to New York or has a physical presence in the state (such as an office or warehouse), then your company might have to register.
If you do qualify as transacting business in New York, you’ll need to register as either:
Figuring out whether your activities and conduct constitute transacting business in New York can be murky and complicated. If you’re not sure whether you should register as a foreign business, you should talk to a New York business attorney. They can help you determine whether your business activity in New York is of a level that requires you to register with the DOS.
In its Business Corporation Law and LLC Law, New York provides a limited list of exceptions for activities that aren’t considered to be doing business in the state. If your company’s operations are limited to one or more of these exceptions, then you don’t need to qualify to do business in New York:
(N.Y. Bus. Corp. Law § 1301 (2023); N.Y. Ltd. Liab. Co. Law § 803 (2023).)
This list of exempt activities isn’t exhaustive and other activities might also be exempt. Moreover, if your company engages in interstate commerce, then those activities related to interstate commerce also don’t qualify as doing business in New York.
LLCs and corporations doing business in New York—except those conducting activities that qualify as exempt—must apply for authority to do business with the DOS. The applications for foreign corporations and foreign LLCs are slightly different.
For more detailed information about these requirements, see the DOS FAQ page for businesses.
Corporations must file an Application for Authority with the DOS. Mail the completed form to the DOS’s Division of Corporations. As of 2023, the filing fee is $225.
For corporations, the application for authority must include the following information:
Along with your application, you need to attach a certificate of existence or a similar certificate—such as a certificate of good standing or certificate of status—that certifies that your corporation is in existence in its state of incorporation. (N.Y. Bus. Corp. Law § 1304 (2023).)
LLCs must file an Application for Authority with the DOS. You can mail the completed form to the Division of Corporations. As of 2023, the filing fee is $250.
For LLCs, the application for authority must include the following information:
You also must attach one of the following:
Apart from filing the application with the DOS, you also must publish the information contained in the application once a week for six successive weeks. You must publish this information in two newspapers in the county where your LLC will have its principal office in New York. One newspaper must be printed weekly and one newspaper must be printed daily. The county clerk should designate the newspapers that satisfy this requirement.
(N.Y. Ltd. Liab. Co. Law § 802 (2023).)
Similar to other states, New York doesn’t allow any foreign LLC or corporation not authorized to do business in the state to file a lawsuit in New York. However, companies that haven’t registered as foreign LLCs or corporations can still defend against any lawsuit or action in New York. (N.Y. Bus. Corp. Law § 1312 (2023); N.Y. Ltd. Liab. Co. Law § 808 (2023).)
Additionally, New York’s LLC Law says that a member, manager, or agent of a foreign LLC isn’t liable for the LLC’s contractual obligations, liabilities, or debts just because the foreign LLC is doing business in New York without authorization. For example, suppose an LLC is sued by a New York client for a failed home delivery. The LLC isn’t authorized to do business in the state. The LLC’s members wouldn’t be personally on the hook for the failed delivery for the sole reason that the LLC wasn’t authorized to do business in New York. Another reason would need to exist for the members themselves to be liable. (N.Y. Ltd. Liab. Co. Law § 808 (2023).)
Once you register your foreign LLC or corporation, you’ll need to follow the rules and regulations that apply to your foreign business. For example, you could be responsible for paying a franchise tax and other business taxes, filing tax returns, and submitting biennial statements. You can find out more on the DOS FAQ page for businesses mentioned earlier in this article. For additional guidance on maintaining your registration, read our article about LLC annual report and tax filing requirements in New York.
For specific legal questions, consider reaching out to a New York business lawyer. They can advise you on your business activities, provide guidance on your obligations as a foreign business, and explain the consequences of failing to apply for authorization with the DOS.
]]>If you formed your corporation or limited liability company (LLC) in Illinois, then you’re already authorized to do business in the state. But if you formed your business in another state, Illinois requires you, in most circumstances, to apply for authority to do business within the state.
Illinois’s foreign qualification process can be complicated and confusing. There’s no consistent standard around when foreign businesses must apply for authority with the state government. Additionally, the application can be difficult to complete and the application fee requires estimated calculations. For help with this complex process, you might find it useful to talk to an Illinois business lawyer. An experienced attorney can help you decide whether you need to file for authority in the first place and they can help you fill out the application when you’re ready.
(For additional non-state-specific information, read about qualifying to do business outside your state.)
Illinois law requires any company formed outside of Illinois (called a “foreign business”) that transacts intrastate business in Illinois to file for authority to do business in the state. “Intrastate business” refers to transactions and operations that take place within the state—as opposed to transactions and operations that are conducted between states (called “interstate business”).
For example, suppose you formed your company in Indiana but have since opened a second store in Illinois. Your Illinois store does business with Illinois customers from its Illinois location. In that case, you’d need to file for admission to do business in Illinois.
The two most common types of foreign businesses are:
Illinois’s Business Corporation Act of 1983 and LLC Act don’t define what constitutes “doing business” in relation to foreign entities. However, you can look to some court cases to get a good idea about which activities are considered “doing business” in Illinois.
For example, some courts have said that a corporation qualifies as “doing business” in Illinois if its business activity in the state is fairly permanent and continuous—not just occasional or casual. (Hendry v. Ornda Health Corp., Inc., 318 Ill.App.3d at 853 (2000).)
For more insight into which business activities require registration, you can look at which activities don’t qualify as intrastate business (discussed below).
Under Illinois’s Business Corporation Act of 1983 and LLC Act, some activities don’t constitute doing business in the state. If your corporation or LLC only does the following activities, you don’t need to qualify to do business in Illinois:
(805 Ill. Comp. Stat. 5/13.75 (2023); 805 Ill. Comp. Stat. 180/45-47 (2023).)
Additionally, any activities that are considered part of foreign or interstate commerce wouldn’t qualify as doing business in Illinois. Companies participating in foreign or interstate business wouldn’t have to register with the state as a foreign entity.
The Secretary of State (SOS) has two different forms for LLCs and corporations. These forms and the registration requirements are fairly different between the two foreign business structures. However, as of 2023, the filing fees for the forms are the same. The minimum fee for the LLC and corporation forms is $150. The filing fee must also include any fees owed for licensing, franchise tax, penalties, and interest.
Additionally, you must submit the applications in duplicate.
A foreign corporation must provide the SOS with a range of information. In addition to sending the SOS a recent certified copy of its articles of incorporation, a foreign corporation must file an application (and a copy of the application) that provides the following:
(805 Ill. Comp. Stat. 5/13.15 (2023).)
You can download Form BCA 13.15 Application for Authority to Transact Business in Illinois from the domestic and foreign corporations publications/forms section of the SOS website. You can mail the form to the SOS’s Department of Business Services.
Providing the necessary information in the application and calculating the appropriate fee can be challenging. The SOS provides A Guide for Qualifying Foreign Corporations that can help you better understand the application process. The guide also has information about when you should register as a foreign corporation and the associated penalties for failing to register.
A foreign LLC that wants to transact business in Illinois must first be admitted. A foreign LLC must submit an application for admission to the SOS to transact business that includes the following information:
(805 Ill. Comp. Stat. 180/45-5 (2023).)
You must also submit with your application an authenticated certificate of good standing or similar document that’s dated within the last 60 days.
You can download Form LLC 45.5 Application for Admission to Transact Business from the LLC publications/forms section of the SOS website. You can mail the form to the SOS’s Department of Business Services Limited Liability Division.
If a foreign LLC or corporation transacts business in Illinois without the authority to do so, it can’t file or maintain a civil lawsuit in the state. However—regardless of its authority to transact foreign business—the company can still defend itself against any actions or lawsuits in Illinois. Moreover, the failure of a foreign LLC or corporation to get the authority to do business in Illinois doesn’t affect the validity of any company contract or act.
Penalties for foreign corporations. An unauthorized foreign corporation is responsible for paying all fees, franchise taxes, penalties, and other charges it would’ve had to pay to the current date if it’d properly and timely registered. For example, if a corporation should’ve registered in 2021 but it’s now 2023, then that corporation is responsible for all the fees, franchise taxes, penalties, and interest from 2021, 2022, and now 2023.
Additionally, if a foreign corporation doesn’t file an application for authority within 60 days of when it started doing business in the state, then it’s liable for the greater of either:
Penalties for foreign LLCs. An unauthorized foreign LLC is responsible for paying all fees, franchise taxes, penalties, and other charges it would’ve had to pay to the current date if it’d properly and timely registered. Additionally, if a foreign LLC doesn’t file an application for authority within 60 days of when it started doing business in the state, then it must pay a penalty of $2,000 plus $100 for each month or fraction of a month it continued to do business without authorization.
(805 Ill. Comp. Stat. 5/13.70 (2023); 805 Ill. Comp. Stat. 180/45-45 (2023).)
Just like domestic corporations and LLCs, your foreign business will be responsible for maintaining its authority to transact business in Illinois. Every year you’ll need to file an annual report and pay the franchise tax. For more about maintaining your LLC, check out our article on LLC annual report and tax filing requirements in Illinois.
You might also be responsible for other business taxes and filings, such as sales tax and employment tax. You can learn more on the Illinois Department of Revenue website.
]]>This article covers when you should register as a foreign business in California. For more general guidance, read our article on qualifying to do business outside your state.
California requires any out-of-state business that enters into repeated and consecutive transactions in California—other than for foreign or interstate commerce—to register as a foreign entity with the state government. These types of activities are considered “intrastate commerce,” meaning activities that happen within the state. (Cal. Corp. Code § 191 (2023); Cal. Corp. Code § 17708.03 (2023).)
Two common types of foreign businesses that California recognizes are:
When transactions are considered repeated and consecutive might be tricky to nail down. The state Franchise Tax Board (FTB) considers companies as “doing business” if they either:
You can find more information, including the qualifying sales, property, and payroll amounts on the doing business in California section of the FTB website.
Some activities that are considered “doing business” by the FTB for tax purposes can be different from the activities considered “doing business” for the purpose of foreign registration. If you need legal advice about whether your business activities require foreign registration, you should talk to a California business attorney. They can advise you on your filing obligations and can file the appropriate registration form for you.
California’s Revised Uniform LLC Act and General Corporation Law provide a list of activities that don’t constitute transacting intrastate business and—as a result—don’t require registration. So, any company that engages only in these activities in California wouldn’t need to register as a foreign business.
These excluded activities are the same between LLCs and corporations and include:
(Cal. Corp. Code § 191 (2023); Cal. Corp. Code § 17708.03 (2023).)
As discussed above, in California, some activities don’t qualify as transacting intrastate business. Likewise, certain statuses or positions the business has don’t qualify as transacting intrastate business. For example, a foreign business doesn’t need to register in California merely because its subsidiary does business in California or merely because of its status as any one or more of the following:
(Cal. Corp. Code § 191 (2023); Cal. Corp. Code § 17708.03 (2023).)
If you’re doing business in California and you don’t qualify for one of the listed exemptions, then you’ll need to register your business with the California Secretary of State (SOS). Your business will need to file a certificate of registration or qualification:
You can complete and mail the form to the SOS or file the form online.
To complete the application, you must provide more or less the same information that you need to register a business in your home state. For an application for foreign registration for both corporations and LLCs, you need to provide:
(Cal. Corp. Code § 2105 (2023); Cal. Corp. Code § 17708.02 (2023).)
You must include a current certificate of good standing with your application. The certificate must be issued by the agency where the business was formed (usually a secretary of state).
The SOS can certify a copy of your application for a small fee. You can also drop your application off in person. In-person filings have an additional fee. For more information on business forms, check the SOS’s filing tips webpage.
There are fees and penalties associated with transacting business in California when your company hasn’t registered as a foreign entity.
The penalties for a foreign corporation that doesn’t have a valid certificate include:
(Cal. Corp. Code § 2203 (2023).)
LLCs that don’t have a valid registration certificate also can’t file a lawsuit in California. However, not being registered doesn’t prevent your LLC from defending against a lawsuit in California. Also, a member or manager of the LLC isn’t liable for the LLC’s debts, obligations, and other liabilities solely because the company transacted business in California without a certificate of registration. (Cal. Corp. Code § 17708.07 (2023).)
You’ll need to maintain your registration just as you would if you incorporated or organized your company in California. After registering your foreign business, you’ll also be responsible for paying applicable business taxes and filing the associated returns. Make sure you keep up with these registration and filing requirements. You can find information about these requirements in the business sections of the SOS website and the FTB website.
For more guidance, check out the SOS’s frequently asked questions page. You can find answers to questions about when and how to register your foreign business. This page also directs you to the relevant state laws if you’re interested in reading further.
You can also find more information about maintaining your LLC’s registration by reading our article about California LLC's annual report and tax filing requirements.
]]>For state-specific information on qualifying as a foreign business in another state, see our state guide to qualifying your company to do business in another state.
When you do business in a state, your company is considered either “domestic” or “foreign” to that state. If you formed your company in that state, then you’re a “domestic entity.” If you formed your company in another state, then you’re a “foreign entity.”
For example, suppose your LLC is organized in Georgia and you do business both in Georgia and Texas. In Georgia, your business would be considered a “domestic LLC” because that’s where it’s organized. However, in Texas, your business would be considered “foreign” because your company wasn’t formed in Texas.
The are two main types of foreign businesses:
You can also have a foreign limited partnership, though foreign corporations and LLCs are more common.
If you plan on doing business in a state other than where you organized your LLC or incorporated your corporation, you'll have to check out the rules of the state where you'll be providing your goods or services. Every state has its own variations on when a business must qualify as a foreign LLC or corporation.
While every state is slightly different, all states generally follow the same basic principle: If a company is engaged in intrastate business in a state, that company must qualify to do business in that state. If the company’s operations or transactions in a state are merely incidental to a larger interstate business operation, they might not have to qualify.
Let’s define the terms intrastate and interstate so we can better understand the difference between the two types of businesses:
For example, suppose Gray Matter LLC is organized in New Mexico and runs a candy shop out of Albuquerque. The business also sells specialty candies online to customers across the United States. Even though Gray Matter LLC sells to customers in California and Illinois, these sales would likely be considered incidental to the company’s interstate online business operations. So, Breaking Sky probably wouldn’t have to qualify to do business as a foreign LLC in California, Illinois, or other states. Though, again, it’s a good idea to check each state’s rules for when you need to register.
Generally, your LLC or corporation must qualify to do business in any state where it’s engaged in intrastate business, meaning that at least part of your business is conducted entirely within that state's borders. For example, suppose your Nevada business has a warehouse in Oklahoma and you sell and ship from that warehouse to customers within Oklahoma. You’d be engaged in intrastate business in Oklahoma.
Typically, state foreign entities laws require you to register as a foreign business if you’re “transacting business” or “doing business” in that state. But most states don’t specifically define “transacting business” or “doing business” in relation to foreign registrations.
Many states require a foreign business to qualify as a foreign LLC or corporation if the business has a physical presence in—or nexus with—the state. Generally speaking, physical presence and nexus are synonymous, and mean having:
Some exceptions can apply and not every state has the same laws or metric for determining when a company must qualify to do business. Nevertheless, in general, if you have a physical location in another state, you’ll need to qualify your LLC or corporation as a foreign business in that state.
States exempt particular types of business from the definition of intrastate business. As discussed earlier, if your business takes part in intrastate business, you have to register with that state. But when states exempt an activity that would normally be considered intrastate business, you don’t have to register with that state if your business engages in only the exempted intrastate activity.
Here are some examples of the types of business activities that out-of-state corporations and LLCs can potentially conduct without having to qualify as a foreign business:
Some states—including Washington, North Carolina, Louisiana, Oregon, Kentucky, Nevada, and Michigan—exempt the activity of simply owning real or personal property in a state. In those states, if you own property but don’t do anything with the property, you wouldn’t have to qualify to do business in that state. But if you were leasing the property or producing income from it in some way, then you probably would have to qualify your business.
For example, suppose you have a business in California but you own a vacant building in Oregon with plans to eventually expand your business operations to Oregon. Currently, you don’t do business in Oregon and haven’t set up anything or done any activity out of or within the vacant building. Because you just own this vacant building in Oregon, you probably wouldn’t have to qualify to do business in Oregon.
It’s important to note that some states, like Louisiana, don’t recognize selling through independent contractors as an exempt type of intrastate business. So, if you sell goods or services through independent contractors in these states, you’d likely have to qualify as a foreign business.
On the other hand, a state can't make you qualify or pay business taxes in that state if you only engage in interstate business with other states—meaning that all of your business is conducted across state lines. For example, if you sell and ship merchandise from your home state to residents in other states, you’re engaged in interstate business, which generally can’t be regulated by other states.
Qualification is simply a registration process that involves filing paperwork and paying fees—similar to the procedures required for incorporating your corporation or organizing your LLC. The form you file with the state will usually be called a “foreign registration statement,” a “certificate of authority,” or something similar.
Generally, the form will ask you to provide the following information:
A person authorized to sign on behalf of your business will need to sign the form. You might also need to make other certifications about your business within the form. Qualification fees can range from $50 to $500 or more depending on the state.
Once you’re registered in a state, you must report and pay state income and sales taxes, as well as file state employment tax filings if you have sufficient payroll, property, and sales in the state.
Let’s look at the forms you’ll need to file and the fees you’ll pay (as of 2023) for some states.
If you do business in a state without authorization, there could be consequences.
Fines. You could be subject to financial penalties, sometimes known as “late-qualification penalties.” Some states have one flat fine while other states impose daily or monthly fines. Under California law, for example, there’s a late-qualification penalty of $250 plus $20 per day for willful (knowing, not inadvertent) failure to qualify. (Cal. Corp. Code § 2203 (2023).)
Not allowed to file lawsuits. Most states prevent companies that haven’t qualified in that state from starting a lawsuit in that state's courts. Under these laws (known as “door-closing statutes”), a court will delay or dismiss your lawsuit if the defendant objects because you didn’t qualify your business in the state.
You should review the rules in the states where your business is engaged in any intrastate business. If you think that your activities might be considered intrastate business in some states, it's best to qualify to do business in those states. Better to deal with the inconvenience and modest filing fees ahead of time rather than face penalties and court delays if the state determines that you should have qualified, but didn't.
If you want an extra opinion or legal advice, consider talking to a business attorney who’s licensed in the state where you want to do business. A lawyer can help you decide whether your business operations qualify as a non-exempt intrastate activity that requires registration. A lawyer can also file the appropriate forms for you and help you maintain your foreign registration.
]]>A domestic LLC does business in the state in which it was formed. A foreign LLC is an entity that is transacting business in a state other than where it was originally formed. Any LLC that does business outside of its registration state must file a “foreign qualification” to permit it to undertake business in other states. Such issues as increased paperwork, tax treatment, and compliance and disclosure obligations may impact whether you decide to stick close to home or explore out-of-state alternatives.
Many LLC owners opt to file in their home state as a domestic LLC if they are physically located and transact most of their business within that state. For example, if you run a retail boutique and make most of your sales in your home state, it probably makes sense to file your LLC in that same state. If you decide to register your LLC in another state, but run your store in your home state, you will have to register and pay filing fees as a foreign LLC. Like other local businesses, you will still have to comply with state and local laws, taxes. and fees, but will now have the added costs, paperwork, and complexity of complying with another state’s mandates. If your LLC is located within one state and your business transactions occur within that same state, it is typically easier and less costly to file an LLC as a domestic LLC.
Some start-ups plan to transact business in numerous states outside of their home state. If your business strategy focuses on out-of-state business, your LLC might benefit from registering as a foreign LLC depending upon applicable advantages. If you think that might be the case, you may want to consult with an attorney or tax professional to determine if registering as a foreign LLC makes sense for your LLC. Three states are often hailed as business-friendly bases for registering as foreign LLCs.
For more information, see our section on Starting an LLC. You'll find all the information you need to form your LLC and get your business started off on the right foot.
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