A foreign LLC is an LLC that was originally formed in one state but then registered to do business in another state. In essence, the LLC is “foreign” to the new state.
The reason for this type of terminology is that every single state is governed by different laws.
A Foreign LLC is not an LLC that is formed outside of the United States.
The requirement to file for a Foreign LLC is usually to expand one’s business operations or to open an additional retail or brick-and-mortar location in a new state.
Note: A lot of people learn about the term “Foreign LLC” when they are thinking of forming an LLC outside of their home state in order to save money on expensive annual fees or taxes. This is actually the biggest mistake that we see in LLC formation (we teach in all 50 states). Forming an LLC outside of your home state will require you to register that LLC in your home state as a Foreign LLC. This means you now have to pay 2 LLC filing fees, maintain a registered agent in the foreign state, and pay annual reporting fees in both states. For more information on what’s the best state to form an LLC, please see this article.
Okay, back to Foreign LLCs…
The process of registering a Foreign LLC is different in every single state, but for the most part you have to file what’s called a “Certificate of Authority”, “Application for Authority”, or “Foreign LLC Registration” (or similar name) in the new state in which you wish to conduct business.
Additionally, you will need to obtain what’s called a “Certificate of Good Standing” or “Certificate of Existence” (or similar form) from the original state where your LLC was formed. Together, these documents, along with a Foreign LLC filing fee is what registers your LLC to do business in the new state.
In most states, the fee to register a Foreign LLC is the same as it is to form a Domestic LLC, however, in a handful of states, the cost to register for a Foreign LLC can be slightly (or significantly) higher than the cost of registering a Domestic LLC.
Do I need a new EIN? If you’re curious about whether or not you need a new LLC when your LLC foreign qualifies, you don’t. Please see do I need a new EIN for an LLC foreign qualification for more information.
Foreign LLC Fees by State:
| State | Foreign LLC Fee | Form/Online Filing | Notes | Questions? |
|---|---|---|---|---|
| Alabama Foreign LLC | $150 | Business Downloads | See Name Reservation Request Form For Foreign Entities ($10 regular/$25 expedited). See Foreign LLC Application for Registration. | Alabama Secretary of State 334-242-7200 |
| Alaska Foreign LLC | $350 | Forms by Entity Type | See Limited Liability Company > Foreign (Non-Alaskan) > Registration of Foreign LLC/Form 08-497. | State of Alaska 907-465-2550 |
| Arizona Foreign LLC | $150 | Forms | See Limited Liability Company Forms > Application for Registration of Foreign Limited Liability Company (Form L025). | Arizona Corporation Commission 602-542-3026 |
| Arkansas Foreign LLC | $270 – $300 | Forms | See Application for Certificate of Registration of Foreign Limited Liability Company (Form FL-01). | Arkansas Secretary of State 501-682-3409 |
| California Foreign LLC | Forms | See Foreign Limited Liability Companies (LLCs) > Application to Register (Form LLC-5). | California Secretary of State 916-657–5448 | |
| Colorado Foreign LLC | $100 | File a Form | LLCs can only be filed online. Under Foreign (outside of Colorado) Entities, click Foreign entity to begin. | Colorado Secretary of State 303-894-2200 |
| Connecticut Foreign LLC | $120 | Forms | See Foreign Limited Liability Company > Application for Registration. | Connecticut Secretary of State 860-509-6002 |
| Delaware Foreign LLC | $200 | New Entities | See Foreign Limited Liability Company, form is called Certificate of Registration of Foreign Limited Liability Company. | Delaware Secretary of State 302-739-3073 |
| Florida Foreign LLC | $125 | Foreign LLC Forms | See Qualification of Foreign LLC. | Florida Department of State 850-245-6000 |
| Georgia Foreign LLC | $225 | eCorp | Create account > Create or Register a Business > I am registering a foreign (non-Georgia) business that is in good standing in its place of formation. | Georgia Secretary of State 404-656-2817 |
| Hawaii Foreign LLC | $50 | Foreign LLC | See Register Online or Application for Certificate of Authority (Form FLLC-1). | State of Hawaii 808-586-2727 |
| Idaho Foreign LLC | $100 | LLC Forms | See Foreign Entity Registration > Foreign Registration Statement (Limited Liability Company). | Idaho Secretary of State 208-334-2301 |
| Illinois Foreign LLC | $150 (used to be $500) | LLC Forms | See Application for Admission to Transact Business (Form LLC 45.5). | Illinois Secretary of State 217-782-6961 312-793-3380 |
| Indiana Foreign LLC | $125 | Business Forms | See Limited Liability Companies (Foreign) >Application for Certificate of Authority (Form 49464). | Indiana Secretary of State 317-234-9768 |
| Iowa Foreign LLC | $100 | Business Forms | See Foreign Limited Liability Companies (489). | Iowa Secretary of State 515-281-5204 |
| Kansas Foreign LLC | $165 | Busines Forms | See "Foreign Entity Application for Registration" (Form FA). | Kansas Secretary of State 785-296-4564 |
| Kentucky Foreign LLC | $90 | Filing Forms | See Certificate of Authority (FBE). | Kentucky Secretary of State 502-564-3490 |
| Louisiana Foreign LLC | $150 | New Filings | See Foreign Limited Liability Company. | Louisiana Secretary of State 225-925-4704 |
| Maine Foreign LLC | $250 | LLC Forms | See MLLC-12 (Statement of Foreign Qualification to Conduct Activities). | Maine Secretary of State 207-624-7736 |
| Maryland Foreign LLC | $100 | Forms | See Foreign (non-Maryland) Businesses > Foreign Limited Liability Company Registration. | Maryland Secretary of State 410-767-1330 |
| Massachusetts Foreign LLC | $500 | Foreign LLC | See Foreign Limited Liability Company Application for Registration (PDF). | Massachusetts Secretary of the Commonwealth 617-727-7030 |
| Michigan Foreign LLC | $50 | LLC Forms | See Application for Certificate of Authority to Transact Business (Form 760). | Michigan Secretary of State 517-241-6470 |
| Minnesota Foreign LLC | $185 – $205 | Foreign LLC Forms | See Certificate of Authority to Transact Business in MN (LLC). | Minnesota Secretary of State 651-296-2803 |
| Mississippi Foreign LLC | $250 | New Filing | Create account > Register an Out-of-State Corporation, Non-Profit, LLC, Partnership or Business Trust. | Mississippi Secretary of State 601-359-1633 |
| Missouri Foreign LLC | $50 online, $105 by mail | Fees and Forms | See Application for Registration of a Foreign Limited Liability Company (LLC 4). | Missouri Secretary of State 573-751-4153 |
| Montana Foreign LLC | $70 | Foreign LLC | See Application for Certificate of Authority. | Montana Secretary of State 406-444-3665 |
| Nebraska Foreign LLC | $120 | Forms | See Limited Liability Companies (Foreign) > Certificate of Authority. | Nebraska Secretary of State 402-471-4079 |
| Nevada Foreign LLC | $425 | All Forms | See Foreign Limited-Liability Company (NRS 86.544). | Nevada Secretary of State 775-684-5708 |
| New Hampshire Foreign LLC | $100 | Foreign LLC Forms | See Form FLLC-1 Application for Foreign Limited Liability Company Registration. | New Hampshire Secretary of State 603-271-3246 |
| New Jersey Foreign LLC | $125 | Getting Registered | See information pertaining to "out-of-state (foreign) legal entity". | New Jersey Department of State 609-292-6748 |
| New Mexico Foreign LLC | $100 | Foreign LLC | See Application for Registration. | New Mexico Secretary of State 505-827-4508 |
| New York Foreign LLC | $250 | Application for Authority | See Fillable Application for Authority Form. | New York Department of State 518-473-2492 |
| North Carolina Foreign LLC | $250 | Forms | See Application for Certificate of Authority (Form L-09). | North Carolina Secretary of State 919-807-2000 |
| North Dakota Foreign LLC | $135 | Forms | See Foreign Business Limited Liability Company Certificate of Authority Application. | North Dakota Secretary of State 701-328-2900 |
| Ohio Foreign LLC | $99 | LLCs | See Foreign Business Entities > Limited Liability Company > File Registration of a Foreign > Limited Liability Company (Form 533B). | Ohio Secretary of State 614-466-2655 |
| Oklahoma Foreign LLC | $300 | Forms | See Foreign limited liability companies > Registration of Foreign Limited Liability Company Forms and Procedures. | Oklahoma Secretary of State 405-521-3912 |
| Oregon Foreign LLC | $275 | Foreign LLCs | See Application for Authority. | Oregon Secretary of State 503-986-2200 |
| Pennsylvania Foreign LLC | $250 | Forms | See Foreign Associations > Foreign Registration Statement. | Pennsylvania Department of State 717-787-1057 |
| Rhode Island Foreign LLC | $150 | Forms Library | See Application for Registration (450). | Rhode Island Secretary of State 401-222-2357 |
| South Carolina Foreign LLC | $110 | Forms | Click Starting a Business. Then look for Limited Liability Company - Foreign. | South Carolina Secretary of State 803-734-2158 |
| South Dakota Foreign LLC | $750 – $765 | LLCs | See Foreign Limited Liability Companies > Application for Certificate of Authority Application. | South Dakota Secretary of State 605-773-3537 |
| Tennessee Foreign LLC | $50 per member ($300 minimum / $3,000 maximum) | LLCs | See Forms: Formed Outside of Tennessee > Application for Certificate of Authority (ss-4233). | Tennessee Secretary of State 615-741-2286 |
| Texas Foreign LLC | $750 | Forms | See Limited Liability Company Application for Registration (Form 304). | Texas Secretary of State 512-463-5555 |
| Utah Foreign LLC | $70 | Foreign LLC | See Foreign Registration Statement. | Utah Secretary of State 801-530-4849 |
| Vermont Foreign LLC | $125 | Fees and Filings | See Limited Liability Companies > Certificate of Authority Application. | Vermont Secretary of State 802-828-2386 |
| Virginia Foreign LLC | $100 | Foreign LLCs | See Application for a Certificate of Registration to Transact Business in Virginia as a Foreign Limited Liability Company (Form LLC1052). | Virginia Corporation Commission 804-371-9733 |
| Washington Foreign LLC | $200 | Foreign Entity | See Foreign Entity Registration. | Washington Secretary of State 360-725-0377 |
| Washington DC Foreign LLC | $99 | Foreign Filing | View documents > all documents > search for FN-1. | District of Columbia Office of the Secretary 202-442-4400 |
| West Virginia Foreign LLC | $150 | Form LLCF-1 | See Application for Certificate of Authority of Limited Liability Company (Form LLF-1). | West Virginia Secretary of State 304-558-8000 |
| Wisconsin Foreign LLC | $100 | Filing Forms | See Foreign Limited Liability Company Certificate of Registration Application (Form 521). | Wisconsin Secretary of State 608-261-7577 |
| Wyoming Foreign LLC | $100 | Forms | See Limited Liability Companies > Out-of-State Forms > Certificate of Authority. | Wyoming Secretary of State 307-777-7311 |
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.
Hi!
Excellent article! I have a strange business. I have an LLC in the state of Ohio that performs live Improv comedy shows at bars and theaters. Sometimes we take tours and do shows in other states (PA in particular). Do we need a Foreign LLC registration in each state we perform in from time to time? If we’d have to do this in EVERY state we’d tour in… that would really limit our ability to tour.
Also, sometimes we go in and teach classes and are potentially considering teaching a class in PA. We would not open up a physical location but would teach in a neutral location (a community theater would bring us in, or a church). Because these contracts are approved by me (the sole member of the LLC in the state of Ohio), must I register?
Thank you for all of your help. Your articles have been great at providing me some of the information I need, but I still have a question.
I am a military spouse located (with military member) in NC. My home of record, however, is MI. I am forming an LLC for products I create to sell online. I understand that I will have to have some form of a single-member LLC in NC since this is where I will be conducting business from, but am not sure how I should proceed aside from that. Should I create an LLC in MI and a Foreign LLC in NC, or simply create the LLC in NC? Would I be subject to taxes for the LLC in MI even though no business will be transacted there while we are stationed in NC?
We have about another 10 years in the military, but do want to return to MI once retired. There are no installations in MI so we would not be stationed or live there until after our time in service.
You’re welcome Amanda. Thanks for the info. Here’s what I’d do knowing that I’ll eventually return to Michigan. I’d form the LLC in Michigan and then register it as a foreign LLC in North Carolina. When I move back to Michigan, I’ll cancel/withdraw the North Carolina foreign qualification.
If you did this, no, you wouldn’t pay any state taxes in Michigan. You might need to file a “zeroed out” information return in Michigan and apportion all income to North Carolina – or no informational return is needed. Either way, you won’t pay Michigan state taxes just because your LLC is formed there. I recommend speaking with an accountant (or two) for details.
Keep in mind, that with a Michigan LLC that is foreign-qualified in North Carolina, you’ll need a Michigan Registered Agent for the Michigan LLC and a North Carolina Registered Agent for the North Carolina foreign LLC registration.
And you’ll need to file a Michigan LLC Annual Report and a North Carolina LLC Annual Report each year. Hope that helps! Let me know if you need anything else.
We currently live in Texas and are turning our residence into a short term vacation rental property. We are using a full service property management company that’s local in Texas. They will be conducting all business on our behalf in Texas only and we will be moving to Washington. We want to eventually create an LLC for this rental property. We will also have a registered agent local to our property location. Do we need to file for a Foreign LLC or can we file for a Domestic LLC since all business will be conducted here?
Hi Brooke, in this case, it would make sense to form a domestic Texas LLC. You actually can’t “form” a foreign Texas LLC. A foreign Texas LLC registration is when you have an out-of-state LLC that already exists, and then you register it to do business in Texas (as a foreign LLC). Hope that helps.
Hi I was wondering if a company hires remotely in different states as 1099 contractors, would you still have to file a foreign llc for each state you have employees?
Hi Pat, if they are employees under state law, then a foreign qualification is needed. If they are independent contractors, it’s not an immediate yes or no. It depends what else the business is doing in the state and whether or not those activities would be deemed “transacting business”.
Hey Matt, thanks for your article. Long-time lurker. Quick question for you:
Does it make sense to open a foreign llc in one of the “magical states” to claim lottery winnings anonymously?
Fees aren’t the issue. Privacy is. Since you won’t be transacting business with the foreign llc you don’t even need a Certificate of Authority right? The point of the foreign llc is to use it as a parent company to form the domestic llc in your home-state so that your personal name doesn’t appear in the home-state records.
I would love to see an article from you on handling lottery winnings via llc’s especially because some states force you to reveal your identity which opens you up to bad actors and journalists alike. I just finished reading a news article from reuters where they confirmed they tried to figure out the identity of a lottery winner based on anonymous sources descriptions.
I guess seeking professional services are another issue. But I saw a different news article that said a lawyer was indicted on embezzlement charges from stealing from his lottery winning client.
What are your thoughts? Advice welcome.
Hey Neville! I actually have no idea how lottery winnings work lol, or any laws around them, so not sure I can be much help. However, I can correct you on a few things you mentioned. I think you are misunderstanding foreign LLC registrations. If you form an LLC in Ohio, then it’s a domestic LLC. If you then register that LLC to do business in California, the Ohio LLC has a foreign LLC registration (aka foreign qualification) to do business in California. It’s not two LLCs. It’s one LLC, that’s registered to do business in another state. Furthermore, the one LLC doesn’t own the other. It can’t; there’s only one LLC.
I think what you’re thinking of is a domestic LLC owning a domestic LLC. For example, you form an LLC in Ohio. And then you form an LLC in California, which is owned by the Ohio LLC. This is two domestic LLCs in a parent/child (aka holding/subsidiary) relationship. Hope that helps, at least a little :)
Hey Matt,
I really appreciate you taking the time to respond and your clarification. I think I was overthinking the whole claiming lottery prizes thing — using a domestic LLC is good enough.
Regarding my confusion. When one registers their home LLC in another state for a foreign qualification to do business you have to give your legal name on the foriegn qualification form. My confusion was that if you have an “anonymous” LLC then you have to tie it to your legal name on the foreign registration forms in the foreign state (this thus defeats any purposes towards anonymity).
I wish you all the best. And thank you for a treasure trove of knowledge and awesome website.
You’re welcome Neville. It all comes down to the state’s foreign LLC application (and any Annual Report). Basically, examine the form closely and make sure you have a strategy for every field and every signature. In some states, it’s easy to have a private foreign LLC registration. In others, it’s more complicated.
That’s actually an empowering comment. Not obstacles, but simply break things down piecemeal and approach the relevant parts with a “strategy” as you say. Kind of fun in a way too when framed that way. Thanks again for all your help.
You have a great eye Neville, and a great mindset. If I had more time, I’d “Sherlock Holmes” it with you lol! ;)
Hi Matt, I live in Colorado and will be moving to Florida next year. I am opening an LLC in Florida now, before our move to Colorado. Other than having a funded bank account, LLC in Florida will not do any business/transactions/receive income until we move to Florida. My understanding is that I do not have to register this FL LLC as a foreign entity in Colorado. Is this correct?
Hey Andy, I wouldn’t worry about it. I’d just start using the Florida LLC.
If I am planning on being a virtual bookkeeper, each new client I get, if they are in a different state do I have to set up my LLC as a foreign LLC there? That’s going to get really expensive really quick if I do. Also second question. I want to set up a virtual office so I don’t use my home address or the local PO Box. However, There is a virtual address in North Dakota that looks like it’s just a PO Box. The closest “office” is in either South Dakota or Montana. Being that I’m virtual, if you don’t need to set up foreign LLC’s working virtually, would I have to do an LLC set up in that state and North Dakota, or would I set one up in North Dakota using the foreign address, or set one up in Montana/South Dakota and not have to set one up in North Dakota? My apologies for the extended question.
Hi Steven, I’m assuming you live and do business in North Dakota. If that’s the case, you can form a North Dakota LLC. And no, you don’t need to register that LLC as a foreign LLC in states where have clients. It’s more so about where you are running and operating things from.
You’ll need to list a North Dakota Registered Agent address in the Articles of Organization. That address must be in North Dakota. It can be an address of yours or you could hire a Registered Agent Service. There is also a Principal Executive Office Address and Mailing Address that go on the form, but those can be in any state. So you could use a South Dakota or Montana mailbox or virtual address for those fields if you’d like. Or if you hired Northwest Registered Agent, you could just use their North Dakota address all throughout the Articles of Organization too. There’s a few ways to go about it.
Matt, firstly, thank you for all of your insightful answers to everyone and responding so quickly. My question. I am in state A (California). Buying rental property in state B (Montana). Am I able to open a domestic LLC in state B without having to deal with state A at all? How does this effect filing taxes with both state A and B? Thanks again.
Hi Robert, you’re very welcome. Apologies for this delayed reply. Comments and questions have gotten backed up the past couple of weeks. Please see When is an LLC doing business in California. Because California is very strict about “doing business”, you’d either need to form an LLC in California and register it as foreign LLC in Montana or form an LLC in Montana and register it as a foreign LLC in California. Either way, the LLC will need to pay franchise tax (after its first year: see California LLCs and Assembly Bill 85) and file tax returns in California. Regarding filing taxes in both states, you’ll want to work with an accountant. They will most likely apportion the income. Hope that helps.
Hi Matt,
We have a foreign company located in Libya, We conduct business in the US biding on cars online and shipping them to Libya, Our business deals with transportation & storage within the US.
My question is : After forming an LLC, Would we be able to open a US bank account online for our company or send someone on the company’s behalf to do so.
Thank you for taking the time to answer my question. I look forward to your respond.
Hi Steve, you can do either one, depending on what bank you want to use. If you’re traveling to the US, definitely speak with the bank ahead of time and email them all documents to review before visiting. We have more information here: How to open LLC bank account for non-US resident.
Thanks for all your awesome advice on this site! I have a social media consulting business. My LLC was formed in Illinois, but I have landed a client in GA. Will I need to form a foreign LLC in GA? I read that it’s not necessary unless I have a physical store or selling tangible goods. Is that correct?
You’re welcome Kim! No, you don’t need to register your LLC as a foreign LLC if you are rendering services to a client in Georgia (or any state) while you are working from Illinois. In this context, the laws of doing business (which impact where an LLC needs to be registered, if anywhere besides its home state) have to do with where you’re running the business from and engaging in business activities and not where your consulting clients are located. Hope that helps!
Hi Matt,
Would like to form an LLC in Delaware, Wyoming or Nevada for online Stock investing, do I still need to file as a foreign LLC in the state where I live?
Hi Chris, what state you you in/doing business in?
When setting up a foreign LLC you have the initial fee determined by state, but is that a reoccurring annual fee? For example if I am a resident of SD but currently live in AZ. I would register my LLC in SD and then a foreign LLC in AZ for $150. Would I need to pay annual LLC fees for both my original LLC in SD and my foreign LLC in AZ? Thank you!
Hi Laurie, yes, you are correct. However, there is no Arizona LLC Annual Report. There is a publication requirement though (please see Arizona LLC publication requirement). And yes, the South Dakota LLC will still need to file the South Dakota LLC Annual Report.
You really only have 1 LLC (the South Dakota LLC), however, you have two LLC filings to maintain. Said another way, you have a South Dakota, which by default, can do business in South Dakota. And once it’s registered as a foreign LLC in Arizona, it can do business in Arizona. Hope that helps :)
I love your site! Thank you for sharing your knowledge.
I am starting an LLC in my state.
The business will sell merchandise in other states at a temporary location while participating in festivals. The business will be required to collect sales tax, but does not have any employees other than the owners.
Do I need to obtain foreign LLC status in each state that the business will sell in ?
Thank you!
Thank you Jessica! You’re very welcome. If the events are not regular and recurring, you likely won’t need to register your LLC as a foreign LLC.
Thank you.
Many of the state laws are so vague….
Where can a person find the definition of “regular and recurring events”? Annually? Biannually? Does this require a state specific lawyer?
Many Thanks!
Hi Jessica, no state defines what is doing business. They usually have a short list of a dozen or so things that are not doing business. The laws are written like this to give the states “wide” interpretation of what constitutes doing business. Regular and recurring isn’t defined. Speaking with an attorney is great idea. You can ask them for specific case law which can further help, too.
hi. we are two members of an LLC. one is in columbia but the company is formed in nevada. and i m operating it from other country.
do we have to form foreign llc in columbia??
HI Jamshaid, do you mean that your business partner lives in the District of Columbia? If so, I’m assuming he’s running the business from there? What kind of things to he/she do in DC for the LLC? Does he/she work from home or an office?
LLC Old is registered as foreign LLC in several states. It is then acquired in its entirety by LLC New. The ‘subsidiary’ LLC Old will continue to technically exist for a while, but how do we handle the foreign registrations that exist for LLC Old. The LLC New will want to continue to do business in those states but under its own name, not the name of LLC Old. Can the registrations be ‘transferred’ or filed as a ‘name change’?
Hi Mary, because Old Company LLC and New Company LLC are separate legal entities, the foreign qualifications cannot be transferred. Old Company LLC would withdraw/cancel its foreign registrations and New Company LLC will foreign qualify in those states. Hope that helps.
We registered a LLC in state A years ago and now moved to state B. Single member, no employees. All income has been and will be from state A and state B is only the personal residence and no business will be conducted in state B. We provide Marketing and Accounting services online only for clients in state A. Can we just change the physical address on the Annual Report from state A to state B and use a registered agent who has a physical address in state A? Do we have to register as a foreign LLC in state B although there is no income?
thank you in advance!
Hi Ray, if you are running and operating the LLC from your residence in state B, state B will consider your LLC doing business in state B. Therefore, the LLC is supposed to register as a foreign LLC in state B.
Thanks for your insightful articles. We are two co-founders, one in CA and other in Utah. Most of our operations (Manufacturing) will be in Utah. We are planning to register the LLC in Utah (from your earlier articles). Some questions:
1. For selling manufactured goods in CA, do we need to apply for Foreign LLC in CA? And if we sell good to other states, do we need to have foreign LLC for all states? We are planning to sell on Etsy to start with.
2. Since one co-founder is in CA, does that mean we have to apply for foreign LLC in CA? OR its not required.
Thanks Matt.
Hi Andy, you’re very welcome. Selling goods into another state is interstate commerce and that doesn’t require foreign LLC registration. There might be sales tax filings though. However, the co-founder being a California resident will certainly make the LLC “doing business” in California because of California’s broad rules. I actually just wrote a really in depth comment reply about this here:
https://www.llcuniversity.com/wyoming-llc/why-you-shouldnt-form-an-llc-in-wyoming/#comment-94277
Additionally, please see when is an LLC doing business in California?
So if you form an LLC in Utah, you’ll need to register the LLC as a foreign LLC in California. You’ll need to pay annual franchise tax in California (although California LLC franchise tax is waived the 1st year due to a new law), pay an LLC Estimated Fee (if gross receipts are over $250k), and file an LLC Return of Income (Form 568). Hope that helps.
We formed a c-corp in PA and now one of the employee is taking care of business from NJ. Do we need to take a tax id in NJ or do we need to register this in NJ as Foreign entity. If yes, how do we get tax id and is there any fees for the same.
Hi Pankaj, having an employee in NJ means the C-Corp is transacting business in New Jersey and therefore it needs to register as a foreign Corporation in New Jersey. The C-Corp doesn’t need a new Federal Tax ID Number. Yes, there are fees for the foreign qualification. And you will also have to file payroll returns in New Jersey. We recommend speaking with an accountant to get into the details.
A friend of mine formed a Foreign LLC in State A where he resides. He then dissolved it. He says he is registered in state B, but problem is he needs a Cert of Formation in state B so he can do a real estate transaction. (In State B) . How does he get for state b? Ty
Hi Val, it sounds like your friend formed an LLC in state A, then registered it as a foreign LLC in state B, but then dissolved the LLC in state A. In that case, the foreign LLC registration in state B is now invalid. In order to have an LLC “registered” in state B, they either need to form a new LLC in state B or form an LLC in state A (or state X) and then register it as a foreign LLC in state B. Hope that helps.
Does an LLC formed in State 1 whose only purpose is to fully own a different LLC in formed in State 2 need to register as a foreign LLC in State 2?
Hi Luis, no, not in this case. A Parent LLC doesn’t need to be registered as a foreign LLC in the state in which it owns subsidiary LLCs. Hope that helps.
Thanks so much Matt, very helpful the whole site is pure gold). Follow up question. LLC formed in State A is a creditor to LLC formed in State B (though not an owner/ parent). Does the first LLC need to register as foreign in State B? Thanks again!!!
Hi Luis, you’re very welcome. Thank you! It depends on the state laws. However, typically, to bring suit in a state, a company must be registered to do business in that state.
Matt,
Regarding the question from Luis, can the Parent LLC address be in another state or must it be an address in the state in which it was formed?
Hi AJ, you’ll want to look at the LLC state filing form in question. Generally, there is a Registered Agent address, a Principal Office Address, and a Mailing Address. Sometimes there are more addresses. Sometimes there are less. Sometimes the addresses have different. It all depends on the state. However, based on this example, the Registered Agent address must be in the state where the Parent LLC was formed. Usually the Principal Office Address can be in any state, however, some states require that address to be in the state. And the Mailing Address can be located in any state. In what state is your Parent LLC located?
3 partners have formed a holding company (A) in WY. This holding company will own a subsidiary operating company (B), which will develop apps for a Canadian owned platform. So all work will be remote/online, and no actual business will be transacting in any of the following states. 2 of the partners of (A) live in PA and will be the CEO and CMO of (B), and the other partner who lives in NC will be the COO of (B). (B) will also hire 2 initial remote developers, one lives in PA and the other CA.
What state do you recommend we form (B) in, and would we have to file (B) as a foreign entity in each other state where a remote employee works? (aka if we filed in WY, would we need to file foreign in NC, PA, and CA as well with this setup?)
Does it make a difference if the employee is a contractor instead? (1099 vs W2)
Hi George, yes, the 1099 vs W2 matters, as having W2 employees constitutes “transacting business”, so you’d need to foreign qualify Subsidiary B in all states with W2 employees. Furthermore, in order to run payroll, you’ll be registering Subsidiary B with the Department of Revenue (or equivalent agency) in each of those states where you’re running payroll. There may also be local registrations needed (county, city, town level payroll taxes). Even though the business is online, that doesn’t escape state laws of “transacting business”. Meaning, running an online business from home (in PA and NC) means that LLC is transacting business in those states. Hope that helps.
Hi there,
I totally understand that the LLC should be registered as a foreign LLC if doing business in another state. Does this concept also apply to E-commerce business? For example, if I register a Wyoming LLC but live in Nevada, doing amazon selling business online. Should I still register my Wyoming LLC as foreign LLC in Nevada? To make it clear, that business in Nevada is online, and it doesn’t have physical store or employee. All it may have is utilizing Amazon’s warehouse and FBA service.
Hi Jason, yes, this concept extends to online business, since the online business is being ran and managed from somewhere. While the business is online, all the activities you are doing on behalf of that business are taking place in Nevada. So therefore the LLC will be transacting business in Nevada. Hope that helps.
Since it is so expensive annually to have an LLC based in CA, it seems wise to establish the LLC in AZ for $50 and no annual fee and then pay CA the $70 foreign LLC fee? This way the business never gets dissolved and there is no $800 annual CA fee. Am I missing something? This is for a consulting business based in CA but could do business in any state.
Hi Eric, foreign California LLCs are still subject to the $800 franchise tax and all other tax filings with the California Franchise Tax Board. And a foreign LLC can have its status revoked, which is the equivalent to a domestic LLC being administratively dissolved. If an LLC is doing business in California, we recommend just sucking it up and forming an LLC in California. All other “moves” to get around this end up costing a lot more money, don’t accomplish what people think, and worse, waste a lot of valuable time and can be quite stressful. Unfortunately, it’s the cost of doing business in California. Hope that helps.
OK, thanks. I didn’t realize foreign LLC’s would also have to pay the $800. I found there is still a small advantage to registering in NV/WY/MT/AZ. Looks like it will cost more initially with the $800+$50+$70, but the home state LLC won’t be disolved. A company in California will owe the $800 a year the entire time it is in existence. So if you shut down for a year, and travel, and don’t make a dime, unless you dissolve the company, you will still owe $800 a year. Even if you don’t send in your annual statement of information, and get administratively dissolved, you will still owe the $800 a year. So if you incorporate in another state, you can just cancel your qualification to do business in CA and thus not have to pay the $800 for that company, and then if you don’t operate the business for awhile, it is still there, building credit history, longevity, and not costing you very much money to keep it active.
You’re welcome Eric. Interesting scenario. One small part you may want to look into with an accountant. The LLC also has to file Form 568 (Limited Liability Company Return of Income) each year. I’m not sure how qualifying, cancelling, and re-qualifying may affect that.
Can you transfer your current LLC registered state to another state? Or do you need to create a new LLC?
What is best to avoid foreign LLC costs for real estate property purchases in an outside/new state?
Hi Maria, it depends on the states. Some allow, some don’t. It’s usually referred to as a domestication or conversion. You’ll need to reach out to both states for instructions and procedures. Hope that helps.
Hi Matt,
Thank you in advance for your help. This is a great site!
But I’m still very confused when it comes to Foreign LLCs.
I live in State A. I set up an LLC located in State B. I am a single member owner of this LLC. (I used Northwest, by the way.)
This LLC is going to own property and conduct business in State B only. There will be minimal net income, but I may still chose to classify it as an S-corp for tax filing purposes.
Are you saying that the rules dictate that I must also register this LLC as a Foreign LLC in the state where I personally reside, which is State A?
This seems rather complicated and expensive for a small business.
Thanks for your help.
Hi Eve, great question. We’ll work on doing a better job explaining things. Where an LLC should be formed/registered comes down to where it’s legally transacting business. For most people, that usually happens to be their home state. In the case of real estate investing out of state though, that happens to be the state where the property is located. Hope that helps.
Perfect, I actually had the same question.
Also, what if the entity was a holding company? Let’s say it’s a Series (sub-series) of a Series LLC in NV, WY, ect. taxed as an S-Corp and we’re going to use it as a holding company for stocks or other properties of a Texas C-Corp. Is the sub-series LLC transacting business in the state that it is registered if it physically possesses the Texas C-Corps property? Are there requirements on a per state basis that specifically define what constitutes domestic business transactions?
Hey Mike, yes, each state has different statutes regarding doing business. It’s best practice to have a conversation about this with an attorney. Typically, just owning another company/asset isn’t doing business. But again, there’s not a black and white answer in this case. Hope that helps and thanks for your understanding.
I’m a resident of of New York City and lives most of the time in Connecticut. Means that I have leased properties in both states.
Could I start a LLC in New York and register same company in Connecticut as a domestic but not as a foreign. What will be pluses and minuses if its possible.
Hi Kushan, there is no such thing as taking an LLC from one state and registering it as a Domestic LLC in another state. If an LLC is to be registered in a state where it was not formed, that is considered a Foreign LLC registration. Hope that helps.
Hello – we have a WY LLC and are trying to register as a Florida foreign LLC. We paid for a registered agent in FL., submitted the forms to Tallahassee, and they have been rejected and returned twice. We are following the instructions but apparently are not properly filling out the form. We submitted the $125 filing fee originally plus an additional $35 for certified copy (total $160). After the last rejection we asked the online registered agent if they could complete our filing and they said yes but would charge the state fee again. It appears this could be solved by just resubmitting the application correctly filled out as the state is holding our $160 waiting for the corrected form. Can you offer any suggestions?
Hi Delaney, bummer about the multiple rejections. You are correct about the $160 credit being used/applied. Where do things stand now?
Hello, We formed our parent LLC in New Mexico, but live in PA. If this parent is only a holding company, do we have to file as a foreign LLC? Thanks!
Hey JJ, nope. If the parent New Mexico company is going to own a domestic LLC in Pennsylvania, the parent New Mexico company isn’t doing business in Pennsylvania, so there’s no need to file a Foreign LLC registration/qualification. Hope that helps.
Hello,
I would like to create an LLC (tax S-Corp) in Delaware being the only CEO then in Florida as a foreign qualification in Florida (this will be the place of business because I live in Florida). I know that even if the creation of the company takes place in Delaware I will pay all taxes in Florida because the activity will take place here but I would also have income from other countries (music label), for these revenues there, I would be taxed in Delaware or Florida?
Hi Nicolas, you’ll need to run this question by an accountant since the Delaware LLC being taxed as an S-Corp may need to file with the Delaware Division of Revenue. You may having filings due in both states. Thanks.
Great. Info. Thank you very much. Quick question. I am thinking about forming a single member LLC in Delaware for my incubator hedge fund and am currently living in NJ. I don’t plan to start my business within 2 years, but just wanted to build an investment track record using my own money through the single member LLC. That said, do I need to file this foreign qualification in NJ? I am not doing any business here within 2 years and the LLC in Delaware has only me as a member. Thank you very much!
Hi Jun, New Jersey is quite strict about “doing business” so it would be best to register as a Foreign LLC there after your Delaware LLC is formed. Hope that helps.