How Do I Form an LLC in Various States?

By Larissa Bodniowycz, J.D.

How Do I Form an LLC in Various States?

By Larissa Bodniowycz, J.D.

A common question among small-business owners with operations in multiple states is “How do I form an LLC in various states?" The short answer is: you probably don't need to. Most small businesses only need to “form" a single limited liability company (“LLC") in one state. The business then registers or qualifies that LLC in the other states where it has operations.

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Here's how to go about that.

1. Choose your LLC's home state.

Before you can form an LLC in multiple states, you must form an LLC in one state. The state where the LLC is initially formed is called its “home state." In most cases, it is best to register in the state where your business's primary operations are located.

Delaware, Nevada, and similarly business-friendly states are often touted as the best states to register an LLC. These states do offer benefits for businesses like easy, low-cost registration, and low business taxes. However, for small businesses not physically operated in these states, the benefits are usually outweighed by the costs.

Businesses cannot avoid taxes and legal requirements of the state where they are physically located and do most of their business. By forming in Delaware, Nevada, or a similar state, these businesses usually end up undertaking more financial costs and administrative requirements than if they had just registered in the state where they are physically located.

2. Register your LLC in its home state.

Once you have chosen an appropriate home state for your business, the next step is to form your LLC in that state. Formation is completed through the Secretary of State for the LLC's home state. In most states, you form an LLC by completing and submitting articles of organization or a similar document and paying a fee. It can take a few days to a few weeks for the Secretary of State to process your materials, so do not wait until the last minute to submit your filings.

3. Decide where else you need to register or qualify.

Traditionally, most small businesses only needed to form an LLC in one state, because that was the only state they operated in. Today, however, even very small businesses often have portions of their operations in multiple states, requiring that they register or qualify to do business in multiple states.

As a general rule of thumb, you must register your LLC in each state where it has significant business operations. A physical presence, such as an office or storefront, in a state is a strong sign that you need to register your LLC in there. The registration does not form a new LLC entity. It just obtains permission for your LLC to do business in the state.

The registration of your LLC in a state other than its home state is sometimes called “qualifying to do business" or “foreign qualification." Your LLC is considered a “foreign LLC" in every state other than its home state.

4. Submit the appropriate filings for each other state.

Unfortunately, there is no unified system for qualifying your LLC to do business in multiple states at once. You must complete the appropriate forms and pay the applicable fees in each state where your LLC needs to register.

Similar to formation, you will need to consult with each state's Secretary of State to determine which forms and fees you must complete to register your LLC. The good news is the paperwork and fees for registering your foreign LLC are usually shorter and cheaper, respectively, than forming an actual LLC.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.