Does a Single Member LLC Need to Register to Do Business in Another State?

By Heather Frances J.D.

Organizing your business as an limited liability company provides the owners, known as members, with liability protection offered by state law. When you register your business as an LLC, it gives you legal authority to conduct business in the state in which your register. If your LLC, whether it is a single-member or multi-member LLC, starts transacting business in another state, you typically must register in that state as well. However, not all operations require a business to register, but LLCs that do not register as required can face penalties.

LLC Status Is Determined by State Law

A business registered to do business in one state does not automatically have the right to do business in another state. Typically, registration in the LLC's home state does not cross state lines. Likewise, each state has its own rules for registering an out-of-state, or foreign, LLC. It is through this registration in a new state that the foreign LLC obtains legal status in the new state, allowing it to conduct business there.

Transacting Business

Generally, if you are not actually transacting business in a new state, you do not have to register as a foreign LLC. For example, an LLC can likely drive one of its vehicles into another state without first registering in that drive-through state. However, an LLC cannot legally set up a retail store in another state without registering with the new state. Transacting business typically includes repeated business transactions in the new state, but there is no bright-line rule about what level of commerce is considered "transacting business." Each state makes its determinations based on the circumstances of a particular business.

Ready to start your LLC? Start an LLC Online Now

Registering in Another State

Limited liability companies that want to transact business in another state typically must register with that state's secretary of state or its equivalent business registration office. Each state creates its own filing forms, requirements and fees. Generally, a foreign LLC must submit a form stating its name in its home state, the name it will use in the new state, where it was originally formed, the purpose of the business, its office address, its registered agent in the new state and whether it is member-managed or manager-managed. The new state may require the LLC to provide proof of its formation and status in its home state. Once the foreign company registers, it may have to file annual reports and pay annual fees.

Penalties for Failing to Register

Registration can seem like an unnecessary hassle, but an LLC can face penalties for transacting business in a new state without properly registering first. For example, an unregistered LLC does not have legal standing so it cannot file lawsuits in the new state if it is wronged. Also, courts in the new state can issue orders prohibiting the business from continuing operations, as well as forcing the business to pay the fees and taxes that it would have owed if it had registered as required, along with late fees.

Ready to start your LLC? Start an LLC Online Now
Corporation: Withdrawal Vs. Dissolution
 

References

Related articles

How to Change the State of Incorporation

Corporations have several options when it comes to expanding to new locations or relocating the home base. The state in which the corporation chooses to incorporate is known as its home base, or "domicile." The corporation is considered a citizen of that state. It is relatively easy to obtain the authority to operate in other states as a foreign corporation, while changing the domicile is a more complicated procedure.

Cancelling a DBA

A "doing business as" name, also known as a trade name and a fictitious business name, is the name under which a business operates that may be different from its original, official name. A company may use DBAs to conduct business under a different name for various reasons. For example, a foreign company may use a DBA in a specific location because its creation name is being used by another business in the same area. When a business no longer needs its DBA name, it can cancel the name registration with the local government agency that handles DBA registrations.

How do I Qualify a Florida LLC to Conduct Business in Georgia?

If you are ready to expand your Florida business operations into other markets, you must register or "qualify" your limited liability company with every state in which you plan to conduct business. Registration enables each state to regulate your company's business activities, protect consumers, and collect taxes on sales made within the state. If you transact business in a state like Georgia without registering, your business may be subjected to a statutory fine for operating in-state illegally. For purposes of transacting business in multiple states, your LLC is considered a domestic LLC of the state of Florida and a foreign LLC in the state of Georgia, which simply means that Florida is your home state where you originally formed the business.

LLCs, Corporations, Patents, Attorney Help LLCs

Related articles

How to Transfer a DBA to a New Entity in Texas

Texas law allows businesses to operate under an assumed name, also known as a "doing business as" or DBA, for any ...

How to Relocate an LLC to North Carolina

Relocating your LLC to North Carolina can be done in several ways. North Carolina law allows an out-of-state LLC, also ...

Alaska Foreign Business Registration Requirements

When it comes to business registration, Alaska considers those that aren't based in the state as “foreign,” even if ...

How to Establish a DBA

A DBA, or "doing business as," is a name you use for your business besides your real name. DBAs are also known as ...

Browse by category
Ready to Begin? GET STARTED