Foreign LLC, foreign corporation, and foreign company are all terms that may refer to your business if your company solicits customers or engages in trade in multiple states. Foreign businesses are not necessarily ones that originate overseas; a foreign LLC is simply an LLC that has formed in one state and conducts business in another. Even if your principal place of operating is in your LLCs homestate, you may have to register as a foreign company in every state in which you do business.
By law, states are not permitted to discriminate against companies that formed in other states. Oregon, for instance, could not favor Oregon LLCs over California LLCs. The courts have determined, though, that a registration requirement for foreign businesses is acceptable because companies must avail themselves of the laws of the states in which they operate. Registration allows the state to keep track of all active companies and ensure that they comply with all state regulations. Failure to register as a foreign LLC may subject your company to penalties.
To register as a foreign LLC, contact the Secretary of State’s office in the state in which you want to register. The Secretary of State can also tell you if registering as a foreign LLC is necessary in your situation. Though requirements vary, you typically must register if you answer yes to one of the following five questions:
- Do you have a bank account in the state?
- Do you sell goods or services in the state or actively advertise to residents of the state?
- Do you maintain an office, factory, distribution facility, or retail store in the state?
- Does any of the LLC’s property — including both real and personal property — reside in the state?
- Do you regularly visit the state for business purposes, such as for meetings?
Typically, the Secretary of State’s website will also feature information for foreign corporation or foreign LLC registration — the procedure may be the same for both. The form you need is typically called a Certificate of Authority or Application for Authorization. Fill out the form in its entirety and mail it to the appropriate office along with any required information. There is typically no follow-up or additional filing necessary.
Each state has a different procedure, form, and fee, and there is no centralized registration mechanism. Some states require only your LLC’s name and no registration fee, while others require copies of all your LLC’s filings along with a fee. Some states also have annual or biennial reporting requirements, so you must stay abreast of the requirements in each state you register.