If you own a business that was created in a state other than Virginia, you will need to qualify or register that business in Virginia if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Virginia) limited liability company (LLC) to do business in Virginia.
For Virginia purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Virginia. 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.
According to Virginia’s LLC Act, you are required to register your foreign company with the state of Virginia if you are “transacting business” in Virginia. What does this mean? Well, like most states, Virginia’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:
Certain exceptions may apply and the rules 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, Virginia’s LLC Act specifies certain activities that do not constitute transacting business in the state. The items listed include:
The LLC Act also specifically states that the foregoing list is not exhaustive; other activities also may be exempt. For the full description of each of the listed items, check Section 13.1-1059 of the Code of Virginia.
If your LLC’s only activity in Virginia is one or more of the listed items, you should not need to register with the state.
To register your business in Virginia, you must file an Application for a Certificate of Registration (Form LLC-1052) with the Virginia State Corporation Commission (SCC). You can download a copy of the application form from the SOS website. (The full name printed on the form is Application for a Certificate of Registration to Transact Business in Virginia as a Foreign Limited Liability Company, which is a mouthful.)
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 Virginia application for registration, you need to provide:
You must include an original certified copy (also called an authenticated copy) of your LLC’s articles of organization or equivalent formational document with your application. The articles of organization must have been authenticated within the last twelve months by the secretary of state where your LLC is organized and must include any amendments and corrections you may have added to the original articles. For more details on this requirement, check the instructions included with the application form.
The filing fee is $100.
If your LLC transacts business in Virginia without authority, it cannot bring a lawsuit in any of the state’s courts. In addition, any member, manager, or employee of the LLC who does business in Virginia knowing that a certificate of registration is necessary but has not been obtained is liable for a penalty of between $500 and $5,000. However, not being registered does not invalidate your LLC’s contracts or prevent it from defending a lawsuit in the Virginia.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in Virginia are similar. You will, however, have to use a different application form. See the Virginia State Corporation Commission website for forms, information, and filing instructions for registering a foreign corporation in Virginia.