A limited liability company, or LLC, is a type of business organization permitted by state statutes. An LLC combines the limited liability of a corporation with the pass-through taxation and flexible reporting requirements of a partnership. To operate an LLC in multiple states, you must choose one state as the “home state” of your LLC and register there as a domestic LLC. After registering as a domestic LLC, you must then register your LLC in other states as a foreign LLC.
Fit your business needs with the right LLC package
Choose a home state for your LLC. Typically, a small business will register its LLC in the state where it will be conducting business operations. If you only anticipate conducting business in one state, you may only need to register in that state. If you anticipate operating in multiple states, choosing a home state such as Delaware, Wyoming and Nevada may be attractive. Delaware, Wyoming and Nevada all have highly pro-business climates, with low tax rates assessed on business assets and privacy protections on public filings.
Register your LLC in the home state as a domestic LLC. While the precise method of registration varies among the states, registering as a domestic LLC generally entails filing an Articles of Organization with the state’s Secretary of State. You must choose a name for your business and designate a registered agent to receive service of process. You must also pay the filing fee for a domestic LLC.
Determine what other states you must register in. If your business plans on opening a store or engaging in significant business operations in another state, then you must register your business in that state. However, if you plan on merely maintaining bank accounts, engaging in interstate commerce, collecting debts or conducting an isolated transaction in another state, you will not need to register in that other state.
Register as a foreign LLC in the other states where you plan on engaging in significant business. Depending on the state, registering as a foreign LLC generally requires filling out an application for a “foreign LLC registration” or obtaining a “Certificate of Authority.” In every state where you register your company as a foreign LLC, you must designate a registered agent in that state and comply with that state’s LLC naming requirements. The registration fee for a foreign LLC is typically much higher than for a domestic LLC. Additionally, some states may assess a yearly tax on a foreign LLC that is a percentage of profits earned by the LLC.
Tips & Warnings
Consult with an attorney about the financial implications of operating an LLC in multiple states.
References & Resources
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