If you own a business that was created in a state other than Kansas, you will need to qualify or register that business in Kansas if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Kansas) limited liability company (LLC) to do business in Kansas.
Note: Part of Kansas’s rules for registering foreign LLCs is contained in a relatively new set of laws—the Business Entity Standard Treatment Act—covering registration of foreign businesses generally. The Act refers to these businesses collectively as “foreign entities.”
For Kansas purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Kansas. 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 Rhode Island is a foreign LLC in Massachusetts.
According to Kansas law, you are required to register your foreign company with the state of Kansas if you are “transacting business” in Kansas. What does this mean? Well, like most states, Kansas’s business entity laws do 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:
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.
Like most states, Kansas’s business entities laws specify certain activities that do not constitute transacting business in the state. The items listed include:
For the full, legal description of each of the listed items, check Section 17-7932 of the Kansas Code. If your LLC’s only activity in Kansas is one or more of the listed items, you should not need to register with the state.
To register your business in Kansas, you must file a Foreign Limited Liability Company Application (Form FL 51-10) with the Kansas Secretary of State (SOS). You can download a copy of the application form 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 a Kansas application for registration, you need to provide:
You must include an original certificate of good standing or certificate of existence with your application. The certificate usually is issued by the Secretary of State (or equivalent official) in the state where your LLC is organized. The certificate must be dated within 90 days of when you file your application and the filing fee is $165.
If your LLC transacts business in Kansas without authority, it cannot bring a lawsuit in the state. In addition, the Kansas attorney general can bring a case to stop your LLC from doing further business in the state, and your LLC will be liable for fees and penalties for all years it should have been registered but was not. However, not being registered does not invalidate your LLC’s contracts or prevent it from defending a lawsuit in Kansas. Also, a member of the LLC is not liable for the LLC’s obligations solely because the company transacted business in Kansas without registration.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in Kansas are similar. You will, however, have to use a different application form (Form FA 51-03). See the Kansas Secretary of State website for forms, information, and filing instructions for registering a foreign corporation in Kansas.