How to Qualify as a Foreign Business in Indiana

Learn the rules for qualifying your LLC to do business in Indiana.

By , Contributing Author

If you own a business that was created in a state other than Indiana, you will need to qualify or register that business in Indiana if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Indiana) limited liability company (LLC) to do business in Indiana.

What is a Foreign LLC?

For Indiana purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Indiana. In other words, foreign doesn't mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in Arizona is a foreign LLC in Colorado.

Transacting Business in Indiana

According to Indiana's LLC Act, you are required to register your foreign company with the state of Indiana if you are "transacting business" in Indiana. What does this mean? Well, like most states, Indiana's LLC Act does not specifically define the phrase "transacting business" in relation to foreign registrations.

However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state's residents. Generally speaking, physical presence and nexus are synonymous, and mean having:

  • a warehouse in the state
  • a store in the state
  • an office in the state, or
  • a sales representative in the state.

Certain exceptions may apply and the rules can get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check Nolo's articles on Internet Sales Tax: A 50-State Guide to State Laws.

Certain Activities Are Exempt

Like most states, Indiana's LLC Act specifies certain activities that do not constitute transacting business in the state. The items listed include:

  • defending or settling a lawsuit
  • dealing with internal LLC affairs such as holding member or manager meetings
  • having a bank account in the state
  • having an office, agency, or persons in the state for handling your company's own securities
  • selling through independent contractors
  • soliciting or obtaining orders where the orders require acceptance outside the state before they become contracts
  • making loans or creating or acquiring indebtedness, mortgages, or security interests in property
  • securing or collecting debts
  • owning real or personal property
  • conducting an isolated transaction that is completed within thirty days and is not one in the course of similar, repeated transactions; and
  • transacting business in interstate commerce.

The LLC Act also makes clear that the latter list is not exhaustive; other activities also may be exempt. For the full, legal description of each of the listed items, check Section 23-18-11-2 of the Indiana Code.

If your LLC's only activity in Indiana is one or more of the listed items, you should not need to register with the state.

Certificate of Authority

To register your business in Indiana, you must file an Application for Certificate of Authority: Foreign Limited Liability Company with the Indiana Secretary of State (SOS). You can download a copy of the application form (Form 49464) from the SOS website.

To complete the form, you must provide more or less the same information that you need to create an LLC in your home state. More specifically, for an Indiana application, you need to provide:

  • the name of your LLC as registered in the state where it was organized
  • if necessary, a fictitious name your LLC will use while transacting business in Indiana (you need a fictitious name if your original LLC name or something very similar is already being used by an Indiana registered business)
  • the street address of your LLC's principal office
  • the name of your LLC's registered agent in Indiana
  • the street address of your LLC's registered office in Indiana
  • a statement that the registered agent named in your application has consented to act in that role
  • the date your LLC was organized
  • the state where your LLC was organized
  • the duration of your LLC (which may be perpetual)
  • an indication of whether your LLC is member-managed or manager-managed, and
  • an authorized signature.

You must include an original certificate of existence with your application. The certificate must be issued by the proper authority in your LLC's home state (usually the Secretary of State). The certificate must have been no issued in the last 60 days. The filing fee is $90.

What Happens if You Don't Register?

If your LLC transacts business in Indiana without authority, it cannot bring a lawsuit in any of the state's courts. In addition, the LLC is liable for a civil penalty of up to $10,000. However, not being registered does not invalidate your LLC's contracts or prevent it from defending a lawsuit in Indiana.

Registering a Foreign Corporation in Indiana

If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in Indiana are similar. You will, however, have to use a different application form (Form 38784). See the Indiana Secretary of State website for forms, information, and filing instructions for registering a foreign corporation in Indiana.

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