What Is a Foreign Limited Liability Company?

By April Kohl

Limited liability companies are a state-created form of business that combines the flexible operating practices of a partnership with the financial protections of a corporation. LLCs come in two forms: domestic and foreign. Both forms of limited liability company operate in a similar fashion despite separate requirements being placed on them by the state.

Limited liability companies are a state-created form of business that combines the flexible operating practices of a partnership with the financial protections of a corporation. LLCs come in two forms: domestic and foreign. Both forms of limited liability company operate in a similar fashion despite separate requirements being placed on them by the state.

Definition

A foreign limited liability company is defined as an LLC which has been formed in one state but which is now carrying out business, or wishes to carry out business, in another state. This is in direct contrast to a domestic LLC, which is a company formed in the state in which it will be doing business.

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Registration Process

The registration process for a foreign limited liability company runs along the same lines as for a domestic LLC. The person responsible for running the company -- a member of the company or one of its authorized managers -- submits a registration form to the office of the Secretary of State and accompanies the form with a filing fee. In most states, the application form is different for foreign LLCs compared to domestic LLCs.

Exemption from Registration

Not all business activities in a foreign state will require a foreign LLC to register in order to conduct business. New Mexico, for example, allows foreign LLCs to conduct “one-off transactions” without needing to register. In order to determine whether the business to be conducted is exempt from registration, it is advisable to consult an attorney practicing in the state where business is to be conducted as they are best placed to advise on individual circumstances.

Fee

The fee for registering a foreign LLC varies from state to state, as does the fee for registering a domestic LLC. However, the fee for a foreign business may be significantly higher than its domestic equivalent. For example, as of November 2010, the state of Oregon charges a $100 filing fee for domestic LLCs and $275 for foreign LLCs. Some states also require annual re-registration, with a filing fee for each application.

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What Is a Domestic Limited Liability Company?

References

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