For some businesses, their scope of customers and transactions is limited to their city or area of the state. For example, mom-and-pop restaurants generally serve locals from a single location. But other companies can find themselves reaching across state lines to do business. When companies do business outside their home state, they need to familiarize themselves with that state's business laws to determine whether they need to register with that state.
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.