December 6, 2016

Are You Operating Your Business in Multiple States? What You Need to Know


As a small business owner, it can sometimes feel like you’re expected to be an expert in tax and state law. One common area of confusion and misconception is conducting business in multiple states. By law, if your company plans to conduct business in any other states than your state of incorporation (or LLC formation), then you may need to register your business in those states. This process is called foreign qualification.

For example…

  • You have a restaurant in Florida and decide to expand into Georgia and South Carolina. Once you have locations open in those states, you’re doing business there and will need to file a foreign qualification in both Georgia and South Carolina.
  • You incorporated your business as a Delaware LLC, but are physically located in New York. You’ll need to file a foreign qualification to conduct business in New York. (For this reason, it’s often best for small companies with fewer than five shareholders to incorporate in their home state.)
  • You live in Washington and your business partner lives in California. You incorporated your company in Washington, but recently your partner has been finding and meeting with the bulk of your clients near his home in California. You’ll need to file a foreign qualification in California.
  • You’re a consultant who performs the majority of your work online, with clients in multiple states. In this case, you do not need to file a foreign qualification. Just because you’re making money from clients in other states doesn’t mean you’re transacting business there, according to the law.

multiple states

What is meant by “doing business?”

In today’s mobile/virtual world, it can be difficult to know just what constitutes doing business in a state. If you’re uncertain whether your particular business needs to foreign qualify, you should check with your attorney or accountant. However, here are some general questions to answer:

  • Does your LLC or corporation operate out of any physical presence in the state (i.e. office or retail store)?
  • Are you frequently conducting in-person meeting with clients in the state (and not just conducting business via email/phone)?
  • Does a significant portion of your company’s revenue come from the state?
  • Do any of your employees work in the state? Do you pay state payroll taxes?
  • Did you apply for a business license in the state?

If you answered yes to any of these, your business may need to file a foreign qualification in the appropriate state.

What is a foreign qualification?
To register your company in another state, you will need to submit a Certificate of Authority application (sometimes it’s called a Statement & Designation by a Foreign Corporation) with the particular state’s Secretary of State office. You can download the form from the Secretary of State’s website or have your incorporating company handle the filing and requirements for you. Some states will require you to have a certificate of good standing from the state where your LLC/corporation was formed (which means you’ll need to be up to date on your state taxes, fees, etc.).

Why is a foreign qualification important?

Foreign qualifying your company in states where you conduct business is your legal obligation. Failing to properly register your company could result in:

  • Fines and interest for any time when you were not foreign qualified (in addition to paying the standard fees that should have been paid)
  • Liability for back taxes for the time when you were not foreign qualified
  • Inability to sue in a state where you are not registered

You’ll want to foreign qualify in as few of states as possible. After all, with each foreign qualification comes filing and/or annual fees, additional laws to learn, and added paperwork. However, you simply can’t overlook your business’s legal requirement to foreign qualify; it could end up costing you much more in the long run.

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Nellie Akalp


Nellie Akalp Nellie Akalp is CEO of CorpNet, her second incorporation filing service based on her strong passion to assist small business owners and entrepreneurs in starting their business. Free guides, advice and videos on small business legal topics are available at her Small Biz Corner.

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232 Reactions

  1. Since I do most of my work online for clients all over the country, I’m glad I don’t need foreign qualification. That would be a major pain.

  2. Thanks for the post! Quick question – would a company such as airbnb.com that offers online housing rentals be required to register in each state they offer rentals in? Even if they do not have a physical presence in each state and are based out of CA, they offer professional photos of many of their properties, which requires an employee or contractor to be physically working in that state. Would this classify them as “conducting business” in that state?

    • Nellie Akalp

      Hi Rob –

      Thanks for reading my post and commenting!

      Generally speaking a company that offers online services whether it be housing rentals or any other form of service may be required to register in each state they offer services/rentals in if the transaction took place in that state and the income received from those rentals were received in the state they are doing business in. Physical presence in each state is based on where the transaction takes place and where the monies/income are being deposited into…ie state and if one is accepting and exchanging transaction in that stew, that state’s laws will apply and one must register within that state.

      I hope that helps! Should you have questions and want to discuss further, feel free to call directly at 888.752.0363

      Thank you!
      -Nellie

      • Thanks for the response Nellie! So if we offer an online service in a specific state, but do not have a physical location or bank in that state, would that free us from having to register?

      • Hi I am opening a travel camp on the east coast of the U.S., I and my employees are based in New York. My question is if I am considered to be a New York based business or Multi-State business?

      • Nellie Akalp

        Hi Chasya,

        Great question. Generally, the business will be filed in the state where the physical business address is located. In most cases, the business will only be required to be registered in the home state, however, depending on how much business is being conducted in other states, or if there are physical locations in those states, some foreign qualification filings may be required. If you have any other questions, please feel free to call my office for a free business consultation at 888-449-2638. You can ask for Katie Hendrix at extension 110.

  3. Nellie Akalp

    Hi Rob –

    Thanks for the response.

    Again I cannot give you legal advice, however, the questions’ that you want to ask yourself as follows: even if an online business, where are the servers held, what location? Where are the shareholders located or the employees? The answers will provide you with the answer as to location and which state’s laws will apply. Where are you located and where are you coming up with the ideas to create the business?

  4. If I have an online business with no physical presence in other states but I match students (income paid into my home state) with mentors who maybe located in several other states (that I pay as independent contractors- no taxes withheld). The independent contractors receive one flat rate for services -and all communications occur online, phone, email. No bank accounts in other states, no employees- just independent contractors. Do I need to foreign qualify in the other states? The majority of my business is in home state but I may occasionally get a student needing matching out of state.

    • Nellie Akalp

      Hi Jeanette – Thank you for reading and commenting on my post! Unfortunately I cannot give you legal advice on your specific circumstance, however, I can tell you that a foreign qualification is filed for every state a business has a physical location in so the business can operate in that state.

      I hope that helps!
      Happy New Year!
      -Nellie

  5. An educational consultant who works primarily from a home state but goes into other states sporadically (maybe once or twice a month) to meet and advise clients under contract, would they be required to foreign qualify?

    • Nellie Akalp

      Hi Kendra,

      Thank you for reading & commenting on my post! Generally speaking, a corporation or LLC will need to foreign qualify their business in additional states if they have locations in multiple states or if they are doing a significant amount of business in multiple states.

      I hope that helps!
      -Nellie

      • Hi Nellie,
        Lots of good points in this thread. My company is an S Corp in Florida. All of our guys that work events for us are 1099 sub contractors. We would like to provide services to our clients at convention centers in other states. We will still be using 1099 staff located in those states and will not have physical addresses in those states. Do we need to to do the foreign qualification too? Thanks for the advise, we will be checking with our tax guy as well.

      • Nellie Akalp

        Hi Dave,

        Generally a Foreign Qualification is only required if there will be a physical address in multiple states. I would, however, recommend speaking with your tax professional to make sure your specific company is meeting the necessary requirements. If you have any other questions, please feel free to contact Katie in my office for a free business consultation at 888-449-2638. X110

  6. In addition to opening franchised shops in my home state of California, I am considering one or more in Oregon. It appears I can apportion income appropriately to both states for income tax reporting. What are the pros & cons of registering my C-corp in Oregon as a foreign corporation versus creating a subsidiary corporation in Oregon? Are there other, more preferable, options?

  7. Hi Nellie,
    We own a business incorporated in WA State. We are moving our office to OR however no physical work other than the office will be done in OR. Both owners will be residing in OR. Do we need to file a foreign qualification? Thanks, Amb

    • Nellie Akalp

      Hi Amb,

      Thanks for reading and commenting on my post. Generally, it is required to file a Foreign Qualification when the business will have a physical presence (business address) in a state other than the state the business is registered in.

      If you have additional questions and would like to chat, feel free to call my team and ask directly for Katie Hendrix and a free business consultation: http://bit.ly/Pt4MVP

      -Nellie

  8. Hi Nellie,

    I’m hoping to start a LLC in Nevada or Delaware for the home to my online storefront. The transacting bank account and business will be in the state of incorporation. Even if my customers live in other states I may be able to avoid filing for Foreign Qualification as my business is conducted in the state of incorporation?

    Thanks,
    Cody

    • Nellie Akalp

      Hi Cody,

      Different states have different requirements for Foreign Qualifications. I would recommend speaking with an attorney if you are not sure whether or not this will be required for your LLC specifically.

      Thanks for reading and commenting on my post!
      -Nellie

  9. I am about to launch an online business with a friend of mine but we live in 2 different states. It is strictly online services that we will be providing and there is no storefront. We are getting a bit confused as to the legal matters in terms of which state to register for a tax ID and how to register as an LLC (ie which one of our info do we use) since we are equal partners in this. Help!

    Thanks!

    • Nellie Akalp

      Hi Lanna,

      So sorry for my delayed answer. I just noticed your comment!

      This happens more than you’d think! You essentially have your choice as to which state you’d like to file in. I’d probably suggest doing a little research and perhaps even speak with an attorney or accountant in regards to which state best suits your business. If you have any additional questions, please feel free to call my company for a free business consultation. You can ask for Katie Hendrix at 888-449-2638 x110.

      I hope that helps!
      -Nellie

      • Hello In July I Registered a S Corp in NY, it is doing personal training. My husband was relocated in NJ. I have not done any business yet in 2015 and do not have a brick an mortar. The question I have can I conduct business in 2016 in NJ and pay NJ tax cause this is where I will be living

      • Nellie Akalp

        Hi Chris,

        Generally what would be done in this case would be to dissolve the corporation in New York and refile it in the state of New Jersey. It’s generally recommended to have a corporation or LLC filed in the state where the business is physically located. If you have any further questions, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

    • To set up a representative office in other state/ jurisdiction would need registration in that state jurisdiction. Or it is open to set up.

  10. Hello
    I am an LLC in NJ and provide Tech and structure installation services. I occasionally travel to out of state locations and am normally on site for a week or so. I normally dont return to that state more than once a year. Do I have to register as a foreign business in every state I travel to? Thanks for your help

    • Nellie Akalp

      Hi Chuck,

      I will start by saying that I do recommend speaking with an attorney regarding this issue, as every state has different laws & regulations. However, generally, a foreign qualification is required if the business does a substantial amount of business in that state, or has a physical location in that state. If you have any other questions, my company specializes in Foreign Qualifications. You can reach out to Katie Hendrix at 888-449-2638 x110 for a free consultation.

      Thanks for reading and commenting!
      -Nellie

      • Hi Nellie,

        We registered our llc in Delaware. We work in multiple states that we are are also registered in. We have consultants 1099 that provide our service. The owner lives in the State of Fl. However we do not work with any Fl. residents nor do we intend to in the future. My questions is, can we have a small office in Fl. to work out of? All of our business is done over the phone and online but again we are not working with Fl. consumers. Would we have to register our llc in fl. even though we are not conducting business with any Fl. residents? Thank you!

      • Nellie Akalp

        Hi Chris,

        Generally, it will be required to file in any state where there is a physical address and/or employees, regardless of where consumers are located. If you have any further questions or would like assistance with filing your foreign qualification, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  11. I have a Delaware corp that is now running as a virtual company with no employees and no revenues to report. It runs out of my home office. We do have investors that fund specific activities that are performed at contract organizations globally. Do I need to have a DBA in NY any longer.

    • Nellie Akalp

      Hi Lee,

      Thank you for your question. DBAs are generally only required if the corporation will be doing business under any name other than the full, legal corporation name. If you have any further questions about DBAs, my company offers business consultations over the phone at no cost. Please contact Katie Hendrix in my office at 888-449-2638 x110, and she would be happy to assist you!

      Thanks!
      -Nellie

  12. I hire contractors to do home rehabs for investors out of Arizona. The properties are in states like Arizona, California, Georgia, and Florida. I live in Texas. My main purpose is to fund these jobs and perform project management duties. Occasionally, I will visit the properties and contractors. Do I have to have my business registered in each state? I don’t receive income in these states, I don’t have offices. I pay the contractors with the money I receive from the investor.

    • Nellie Akalp

      Hi Joe,

      Unfortunately I cannot advise you as to qualifying your business in these states specifically, as I cannot give legal advice. However, generally speaking, if a business is operating in a state other than the state of incorporation and has paid employees in such state, generally the state where the employee is located will require the business to qualify as a foreign entity. Mainly for the purpose of paying employee withholding tax in the state where the employee is physically located. I hope this helps. If you have further questions, feel free to call for a free business consultation. Ask directly for Amanda Beren at 805.413.5711|
      -Nellie

  13. Thanks for the helpful write up!

    I own Nevada C corporation that sells apps that I develop online on Apple’s App Store. I created the corp a few years ago while I was living overseas. I’m the only owner and the only payroll employee.

    I am moving to New York City for a year or two. I assume I will need to change the payroll to pay New York payroll taxes? Do you know if I also need to register the Nevada C corporation as a foreign entity doing business in New York?

    The business’s financial transactions consist of incoming App Store payments and outgoing employee (just me) payroll + things like health insurance and 401k plan.

    The only thing I will be doing in New York is working on my laptop from home, coffee shops, or coworking spaces.

    • Nellie Akalp

      Hi Manny,

      Generally, if the physical business address is in a new state, or if a significant amount of business is being done in that state, they will require the corporation to be foreign qualified there. As far as taxes, payroll, etc. I would recommend speaking with an accountant or CPA for guidance. If you have any other questions or would like assistance in filing the foreign qualification, please feel free to call my office for a free business consultation at 888-449-2638. You can ask for Katie Hendrix at extension 110.

  14. If I register in Delaware and foreign qualify in California.
    Do I need to open a separate bank account in California also?

    • Nellie Akalp

      Hi Jack,

      Great question. All banks will have different policies, so I would suggest contacting whichever bank you plan on using and inquire about what their policies are. If you have any further questions, please give my office a call & we would be happy to provide you with a free business consultation. 888-449-2638, you can ask for Katie Hendrix at extension 110.

  15. Nellie,

    My wife and I have an online business which we currently report all revenues to a sole proprietorship under my wife’s name. We lived in New Jersey but now we are moving to Brazil for 6 months and when we come back we are going to be fully mobile (renting places short term wherever we go). we’ll use a PO box or virtual mail address and when in need of a ‘permanent’ home address it will be her parents’ address who live in NJ.

    We’d like to setup a virtual office in NYC so we have a more fancy business address, but we will not be conducting business there. Everything we do will be over the internet, OR, sometimes my wife may engage in speaking or coaching sessions in different states or even different countries.

    Generally what would be a course of action possible for us to take? We were thinking about incorporating our online business as an LLC in Delaware because of the flexibility but we were wondering if having a virtual NY address would make us have to pay taxes there or apply for a foreign certification in NY state?

    I know you can’t give us direct legal advice but i’d love to get some general guidance. What do you suggest?

    Thanks in advance,
    Bernardo

    • Nellie Akalp

      Hi Bernardo,

      Thank you for your question. Many business owners who frequently travel from state to state will set up in a state such as Delaware for tax & privacy reasons. One very attractive thing about Delaware is that they do not require a business address, which is great for those who move around. As far as any tax-related questions, I do recommend speaking with an accountant or CPA. If you’d like to take advantage of the free business consultation that my company offers, please call our representative Katie Hendrix at 888-449-2638 x110. Have a great day!

      -Nellie

  16. I am currently set up in the state of NC as a corp for a home based bakery. I will be moving out of state and no longer
    operating in NC. My question is can I leave it active or do I have to dissolve the business? Or do I leave it active and
    file as a foreign business in the new state that I will be moving too?

    • Nellie Akalp

      Hi Brigitte,

      Will you still be doing a considerable amount of business in the state of North Carolina? If so, the most common approach is to leave it in the home state, and foreign qualify in the new state. If not, generally what’s done is to dissolve the company in the old state, and re-form in the new state. If you have any other questions or need assistance with filing your new company and/or a foreign qualification, please feel free to call Katie Hendrix in my office at 888-449-2638 x110.

      -Nellie

  17. Hi and thank you for such an informative article. My question is, me and three friends of mine are collaborating into starting a jewelry business from each of our homes. The same business but we all live in 4 different states. Will one of us have to soley be in charge in one state (examples:taxes, permits etc). Our store will be on etsy and shopify as well.

    • Nellie Akalp

      Hi Anna,

      Thank you for your question. Corporations, LLCs, and DBAs are filed on a state level (or sometimes a county level) and taxes generally will only apply to the state where the business is actually registered. If you have any other questions, please feel free to contact Katie Hendrix in my office for a free business consultation at 888-449-2638 x110.

  18. Thank you for your information and help. My sister n law started a bowtique online in ks and I live in MO. We are doing it as a partnership. We were wondering if you or anyone knows of a good online bookkeeping program that can be accessed from different states but also works well with partnerships where it can show the things that I make and sell and the things that she makes and sells.

    Also I was wondering if I am understanding this correctly. If we start the business in KS and then have a craft show in MO we need a foreign qualification for MO.

    Thank you

  19. Hi Nellie,

    I am the president of a S. Corp in the state of Pennsylvania, All of my Employee’s are residents of Pennsylvania. S. Corp is a Travel Agency. I the president of the S. Corp have recently moved to Florida. I conduct no business in Florida when it comes to sales or advertizing. I over see the corporation on my lap top computer from my home. Do I need to register as a foreign corp with the state of Florida because I live in Florida?

    • Nellie Akalp

      Hi Tom,

      Great question. Generally, it will only be required to foreign qualify if the company is A) doing a substantial amount of business in the new state, and/or B) has a physical location/business address in the new state.

      If you have any other questions about foreign qualifying, please feel free to contact Katie Hendrix in my office for a free business consultation at 888-449-2638 x110.

  20. I own a company and we hold social events at bars in which people pay tickets to attend. I am incorporated in Maryland but these events are held in other states such as Virginia and Hawaii. The locations are at bars and restaurants. What happens with this? Register in all states? File and Pay taxes to all states?

    My employees are listed as my business location as their work location even tho they live and run the events on their own state. Should they have to pay Maryland income tax even tho they never set foot in Maryland?

    • Nellie Akalp

      Hi Tracy,

      Great question. I would probably recommend speaking with an accountant or CPA to find out what exactly is going to be required of you regarding taxes, as every business and every state is different. Generally, if a company is conducting business in multiple states, it’s usually required to be registered in those states. If you have any further questions or would like assistance in foreign qualifying your company, please feel free to call Katie Hendrix in my office for a free business consultation at 888-449-2638 x110.

  21. I work for a NYS corporation that is looking to do business with a LLC whose main office is in Florida, and has an office in NYC out of which the person I am dealing with work. The engagement agreement states that any legal action resulting from a breach of contract will be held in Florida. Is it their right to make this stipulation in the agreement?

    • Nellie Akalp

      Hi Yvonne,

      Thank you for reading and commenting on my post. Unfortunately your question is quote specific. I would recommend speaking with an attorney as only a legal professional would be best able to provide you with legal advice.

      Thanks!
      -Nellie

  22. Hi – thanks for the detailed post. If you could help with this question, I’d be so grateful. I understand that once you have a multi-state LLC, you need to pay income tax in your foreign state for the income earned in that state. So, what is meant by ‘income earned in that state’ – for example, if my llc is incorporated in FL but also registered in CA, I pay my income tax in FL in full, and then just income tax in CA on sales made in CA?

    • Nellie Akalp

      Hi Josh,

      Great question. The best person to assist you with this inquiry would be an accountant or CPA. Because taxes can get complicated and vary from state to state, I would definitely recommend seeking assistance from a tax professional. If there are any other questions you have, please feel free to contact my office for a free business consultation at 888-449-2638

      -Nellie

  23. If I am a web development and web hosting. company does my business need to do foreign qualifications but I will be doing business all across the world.

    • Nellie Akalp

      Hi Bryan,

      Great question. Generally a company will need to be foreign qualified if the business has a physical presence or business address in that state. If you have any other questions, please feel free to contact Katie Hendrix in my office for a free business consultation at 888-449-2638 x110.

  24. Hi Nellie,
    thank you for answering all those questions!

    I am a non-resident, Danish national who runs a small online dropshipping company with the USA as market. My server is located in Europe. There are no employees. The company is set up as an LLC in Denmark. In short, my company has no presence in the US.

    I have a few questions that I hope you can help me with:
    1) Since I will be selling to 48 US states do I need foreign qualification – when I’m fully based abroad?

    2) If I get a virtual office address in the USA would that count as having ‘presence’ in the USA?

    3) If I get a virtual address in the USA, would I then need to foreign qualify?

    Thanks a lot!
    / Tom

    • Nellie Akalp

      Hi Tom,

      Thank you for your question. As I’m not familiar with the specific requirements in Denmark, I would probably recommend speaking with a business attorney in Denmark. If you find that you are required to foreign qualify, please feel free to give Katie Hendrix in my office for a free business consultation at 888-449-2638 x110 – we’d be happy to file the foreign qualification for you!

  25. Aloha Nellie,

    We live in California and my husband is retiring this year. He and I will be moving full time to Hawaii and starting a consulting business that will be mostly online with an occasional trip back to Ca. All the “jobs” will be in Ca. only. Since the majority of the work will be online and phone calls, should we go ahead and register our business in Hawaii? Is there any benefit to registering it in Ca? Do we need a foreign qualification?

    Mahalo,
    Jo

    • Nellie Akalp

      Hi Jo,

      Generally a corporation or LLC will need to be registered wherever there is a physical address. Keep in mind that if the business is registered in California, it will be required to hold a business address in the state of California. If you have any other questions or need assistance with registering the company, please feel free to call Katie Hendrix for a free business consultation at 888-449-2638 x110.

  26. Hello,

    We have a construction company based out of NH. Most of our customers are in MA and we are registered as a foreign LLC there and collect and submit taxes. My question is, If one of those customers has another location such as CA and our owner goes out, sets up the job and we ship the equipment to be installed to the site, is it free of tax since we are in NH? Second, if we hire local subcontractors to actually do the install? Do we still have to register in that state? Our employees are paid out of NH but we do report roughly how much work is done in MA to our accountant. Thanks!

    • Nellie Akalp

      Hi Angela,

      Generally, it is only required to foreign qualify in a new state if the business has a physical location in that state. (If you have further questions regarding this or would like assistance with foreign qualifying, please feel free to contact Katie Hendrix in my office for a free business consultation at 888-449-2638 x110.) Regarding your tax questions, I would recommend speaking with an accountant or CPA, as tax requirements will vary from place to place.

  27. Wonderful article! I have just registered my HR consulting business as an LLC in the state of FL. I will have a website that offers consulting or training services to 49 states. Most of my work will be over the phone, but I may occasionally hold supervisor trainings and on-site consultations in other states. I wasn’t sure if trainers or public speakers are required to register in each state that they conduct seminars in. Can you offer any insight?

    • Nellie Akalp

      Hi Becki,

      Great question. Generally corporations and LLCs are required to foreign qualify their businesses in additional states if they have physical locations within those states. If you have any further questions about foreign qualifying, please feel free to contact Katie Hendrix in my office for a free business consultation at 888-449-2638 x110.

  28. I have a llc operating in NC. My closest friend would like to become a member in my business, however she lives in state of GA. This is strickly an online business., would i have to do a foreign qualification in both states to conduct business and add my friend to tthe business?

    • Nellie Akalp

      Hi Cathy,

      Great question! Generally a company will only need to be foreign qualified if they have a physical business location in another state. In order to add your friend as a member of the business, chances are you will simply need to file an amendment to add her name to your LLC. If you need any assistance with this or have any further questions, please feel free to call Katie Hendrix in my office for a free business consultation at 888-449-2638 x110.

  29. My husband is a Pa. Resident but a licensed MD and Pa contractor…most of his work is done in maryland. We are looking to inc. And are wondering if we should inc in our home state of pa or MD?

  30. Question #2
    We want to inc as an S-corp with him 49% owner and me 51%. He is a licensed contractor; I am not…does that matter?

    • Nellie Akalp

      Hi Kellie,

      I would recommend speaking with an attorney, as they would be best able to help you determine which state would be best for your specific situation, as well as whether or not each owner will be required to be licensed within those states. Generally speaking, it is usually recommended to register the business in the state where the physical business address is located. If you have any further questions, please feel free to contact Katie Hendrix in my office for a free business consultation at 888-449-2638.

  31. If you are a telecommuncations company. You only have one business location but have muiltple clients all over the country. There are many customer in cities, counties, ext. How would you get out of paying all the business license fees assioated? IF you paid all the business license fees you would go out of business. What owuld be your argumeent?

    • Nellie Akalp

      Hi Donald –

      Thank you for reading and commenting on my post! Generally speaking, one pays business license fees and registrations where one has a physical presence. For example, my business CorpNet.com provides services in all 50 states, yet we are only registered in CA and have a business license with our local county.

      -Nellie

  32. I am a sole proprietorship located in IL & reporting all income with my SS#, all monies pass through my DBA business bank account with my IL address. I am planning to do consulting work in CA, using my IL DBA, with all revenues being deposited through my IL DBA bank account . All work will be done on line & I have no employees anywhere. I will, of course meet with CA business people to discuss the work I will do. I will not have a CA office address or business presence. Will I need a foreign qualification?

    • Nellie Akalp

      Hi Jerry,

      Great question. Generally, unless the business will have a physical office/presence in a state other than the home state, a foreign qualification is not required. However, that being said, regulations can vary from business to business, so it’s always recommend to speak with a business attorney to find out exactly what will be required of your business specifically. If you have any further questions, please feel free to call Katie Hendrix in my office for a free business consultation at 888-449-2638 x110.

  33. In NJ state, I setup a small business as single member LLC for Energy Consultation Services. I am only one member.
    I might have some contract to work in California State for 6 months contract.

    Do I need to register my single member LLC again at California State (So called foreign qualification)?
    Then please advise some brief for the procedure how to file it.

    • Nellie Akalp

      Hi Kyaw,

      Great question! Generally, it will only be required to foreign qualify a company if the business will have a physical address in more than one state. If you have any additional questions or need assistance with foreign qualifying, please feel free to call Katie Hendrix in my office for a free business consultation at 888-449-2638 x110.

  34. Hi Nellie,

    First of all, a big thanks to you for helping people with such valuable guidance.

    My situation is:

    1. I have a Delaware C Corp. Its purely internet based business. Services (no goods) will be entirely provided from off-shore (India or Philippines). I am the single owner of the company with 0 employees in USA.

    2. I reside in NJ and opened a company account here and in the bank records I have given my NJ home address. But I do not perform any work from home either.
    Question: So Do I need to foreign qualify in NJ?

    3. Also, just to look fancy, I want to take a virtual address in NYC. No employees, no intention to conduct business from that location (as it is just virtual address).
    Question: So Do I need to foreign qualify in NY?

    Thanks so much in advance!
    -Andy

    • Nellie Akalp

      Hi Andy,

      Generally a corporation or LLC will need to be foreign qualified if there is a physical business address located in a state other than the state where the business is registered. If you have any additional questions or would like assistance with filing a foreign qualification, please feel to contact Katie Hendrix in my office for a free business consultation at 888-449-2638.

  35. I manufacture a specialty food product in Texas, but now I am beginning to sell to other states. currently the company is a LLC. so would I need to file for a foreign certification since it’s a food product?

    • Nellie Akalp

      Hi Victoria,

      Speaking generally, the business would only need to be foreign qualified if it has an address in multiple states, or in a different state than the state of registration. If you have any additional questions, please feel to contact Katie Hendrix in my office for a free business consultation at 888-449-2638.

  36. HI Nellie,
    Thank you for answering all of these questions! I want to sell one product at, in, and around festivals throughout the US. The company will be based in Texas, but we will sell mostly in other states (traveling). Will I have to get a permit for each and every state? Is there a federal vendors license? It is all so confusing. I am trying to keep cost down.

    • Nellie Akalp

      Hi Erin,

      Because licensing is so specific to city/county and the nature of the business, I would recommend contacting our licensing specialist in my office. Please feel free to reach out to Milton at 888-449-2638 x104.

  37. Nelie,
    Our S corp files taxes in PA, NY and NJ. We have stop doing work in PA and have closed all DOT related accounts. What do I do to notify PA that we are no longer doing work in that state?

    • Nellie Akalp

      Hi Jennifer,

      Was your corporation registered with the Secretary of State of Pennsylvania? If so, a formal dissolution must be filed with the state. My company CorpNet assists with these filings and we’d love to offer you a free consultation. Please contact Katie in my office at 888-449-2638 x110.

  38. Nellie,

    I live in Texas and have two partners that are about to open a business together. One lives in Chicago and the other in Boston. We were thinking of forming a corporation in Texas and then doing DBA’s for each of us to use under the corporation as we don’t necessarily want people to know we are in a partnership. What are your thought on this and do you have any suggestions of how this should be approached?

    • Nellie Akalp

      Hi Roger,

      Thank you for your question. You have quite a few options here on how to structure your company. Please feel free to contact Katie in my office for a free business consultation, and she can assist you with outlining the different options. She can be reached at 888-449-2638 x110.

  39. I’m opening a home based internet business and I live in NY.
    Do I have to file my LLC in NY?

    • Nellie Akalp

      Hi Eva,

      Great question. LLCs don’t necessarily always need to be registered in the state where the business owner lives, however generally speaking this is usually recommended. Sometimes registering outside the businesses owner’s state can result in additional paperwork and fees. You are welcome to contact Katie in my office for a free business consultation at 888-449-2638 x110 if you have any other questions, or if you’d like assistance in filing your LLC.

  40. Hi
    I have a small consulting business registered in IL. Looking to expand business to Maryland area, and one of the requirement of the client is that the company must be registered in Maryland area. Please advise my options.

    Appreciate your time.

    Thank you,
    Kumar

    • Nellie Akalp

      Hi Kumar,

      Generally what is required in this case is to file a Foreign Qualification. This will take your existing business in Illinois and register it to also be able to business in the state of Maryland. If you have any questions or would like assistance with this filing, please contact Katie Hendrix in my office at 888.449.2638 x110.

  41. Hi,

    Is it possible to open an outside US branch/affiliate for a US DBA company?

    Thanks,
    Sam

    • Nellie Akalp

      Hi Sam –

      Thanks for reading and commenting. I suggest contacting your local governing body to check if they’d allow such a filing.

      Sorry I couldn’t be of more help.
      Nellie

  42. Hello,

    I am currently incorporated in Southern CA and operate a environmental service company which provides services to clients that need groundwater testing and other labor oriented tasks. My mother lives in Michigan and I am moving to Michigan to help her out while maintaining a couple of contracts in CA, renting out my home there but keeping bills and auto insurance in CA. I will fly back to CA to perform work on few projects each year, probably about 3 months per yr in CA. While in Michigan I’m planing on doing handyman work and environmental services as well to keep my income going. I don’t have any employees and do all of my work myself. Will I have to file taxes in both states? Do I need the foreign qualification?

    • Nellie Akalp

      Hi Howard,

      Great question. Generally, if the company is operating in more than one state it will be required to foreign qualify. As far as the business’s taxes, I would recommend speaking with an accountant or CPA, as they would best be able to determine what will be required. If you have any additional questions or would like assistance with filing your foreign qualification, please feel free to contat Katie Hendrix in my office for a free business consultation at 888-449-2638 x110.

  43. Hi, Nellie.

    This is an indirect question, but I think maybe appropriate nonetheless. We are a small consulting company (S corporation) which does business in multiple states. Everybody works from a home office (also in multiple states). We do a lot of traveling and meeting with customers in their home locations. We’ve already determined that we need to file as foreign in all of the affected states, both where our employees live and where our clients are, and have done so.

    The problem is that once you do that, the process gets really messy. Some states, e.g., require you to have a physical mailing address in the state if you do business there, even if you don’t have any employees or facilities that reside in the state. We’ve found a company that provides this service for us (for a substantial fee, I might add).

    The other problem we’re having now is that you often need to effectively re-apply every year for the foreign authorization. This includes states that you may not have actually worked in the previous year, but you still need to prove to them that you actually didn’t and you still don’t have anybody who lives there and you really don’t owe them any taxes (which is what they really care about!). Exactly what you need to do in each state is different, and even trying to figure out how to appease each state is painfully time-consuming.

    What we’re really after is some kind of subcontractor who will take of this process for us (with some direction/guidance from us, of course). We’ve been searching and can’t seem to find anybody. The company that provides the mailing addresses doesn’t provide this service, and even if they did it would likely be pretty expensive.

    Any ideas, thoughts, or suggestions?

    • Nellie Akalp

      Hi Bret,

      Usually, the states that require a business address in that state to file a new company don’t have the same requirement when filing a foreign qualification. If you need assistance in filing your foreign qualifications or have more questions, please contact Katie Hendrix in my office at 888-449-2638 x110. She would be happy to assist you with these filings and help you verify the address requirements in the specific states you will be filing in.

  44. Hello,
    I’m working as a consultant with clients in New York. All of my in-person meetings will be held in New York. But I work out of my home office in New Jersey. Do I need to file in both states?
    Thanks!

    • Nellie Akalp

      Hi Rachel,

      Generally a business is required to be registered in any state where they have a physical presence or business address. Although because requirements vary from state to state, it’s often judged on a case by case basis. If you have further questions, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  45. Hi Nellie, I am an oil and gas consultant. Have an LLC registered in Georgia. I will be dealing with different clients from different States and countries without any physical office addresses in any of those states aside my state of incorporated which is Georgia. Do I need foreign qualification in these regard? Thanks.

    • Nellie Akalp

      Hi Timothy,

      Great question. Though the requirements can vary depending on the business and the state of registration, generally a Foreign Qualification is only required to be filed if the business will have a physical presence in multiple states. If you have any other questions, please feel free to contact Katie Hendrix in my office at 888-449-2638 x110.

  46. What about a sol prop? I am about to start a computer repair business.. I live and will register the business in NC.. I live about 1 mile from the SC Border…

    How does it work when i get a service call in SC?

    Most of my work is service and not taxable in NC however i will be installing parts and in some cases new and used computers to clients… I can’t seem to get and real info on what i have to do when it comes to filing or paying taxes once i do work in SC while living and being registered in NC.. I won’t have an office in NC at all….

    very hard to find answers on this ..

    This has been very helpful! thanks for the great read!!!

    • Nellie Akalp

      Hi Randy,

      As taxes vary greatly in different states for different types of businesses, I would highly recommend speaking with an accountant or CPA. This person would be best able to assist you with determining exactly what taxes and filings your specific business will be responsible for.

  47. Hello, As an amazon.com reseller I am required to file sales taxes in states in which I have nexus ( being states that house my inventory in amazon warehouses)… I was wondering if I had to pay income taxes in those states that I have nexus in? Or is it just my home state (Florida having no income tax) I live in Florida and am using a DBA/ sole proprietor

    • Nellie Akalp

      Hi John,

      When it comes to taxes, I always recommend speaking with an accountant or CPA in your area. Tax requirements vary greatly from state to state, so they would be best able to help you determine what taxes your specific business will need to pay.

  48. Hi Nellie –

    Great article! I am a co-founder and owner of Serafin Juice. We are HQ in San Diego, California and our juice is made right outside of Los Angeles. We want to sell and ship our juice to all 50 states but we were wondering if we need another license for that? We won’t be physically traveling to all the states unless it is for one meeting or so but we will be shipping our juice there.

    Thank you!! 🙂

    • Nellie Akalp

      Hi Katie,

      Because licensing requirements vary greatly depending on your city, county, nature of business, and several other factors, unfortunately it’s impossible to know exactly what licenses will be required without some research. Please feel free to call Katie Hendrix in my office for a free business consultation and she can outline your options as far as licensing research. She can be reached at 888.449.2638 x110.

  49. Hi. If I am setting up my online music agency that provides only services. If I operate from UK and have bands in US do I even need to obtain business licences. Can I just file with IRS using a 1040NR and get an ITIN ?

    • Nellie Akalp

      Hi Daniel,

      It’s very difficult to know exactly what licenses will be required for a specific business without some extensive research. It will depend on the city/county of the business, the type of business, whether or not it’s home based, etc. My co CorpNet offers a research package for licensing. If you’re interested or if you have any questions, please contact Katie Hendrix at 888.449.2638 x110.

  50. Great article, Nellie and I think that several of your answers to others have helped me understand my own business situation more clearly. I own a traveling theater. I do not have a physical address in any of the states we travel to work. I am an LLC, all my crew are independent contractors, our work is contracted by venues randomly and so I believe I understand correctly that I do not have to apply for foreign to the other states we work in such as NJ and DE? Thanks much!

    • Nellie Akalp

      Hi Debi,

      Thank you for your question. Generally a foreign qualification filing is only required if a) the business has a physical location in multiple states, or b) the company has actual employees in multiple states. If you have any further questions, please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  51. Hi Nellie,

    Great article. Just to clarify if I have a LLC mainly working at my home state (CT) as an IT consultant. My client (so far my only client) is located in the state NY. Even though I only meet with my client once a month, do I still need to file for foreign qualification for NY state since they’re my only client (income)?

    Thank you so much for your help!

    • Nellie Akalp

      Hi Carol,

      Generally a foreign qualification is only required if the company has a physical location in multiple states, or has employees in multiple states. If you have any other questions, please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110

  52. This was a very informative article. At this time I am wondering if we need to register as a foreign business when we bid on projects. We are a LLC in SD, but we provide items to other states. We have one location in SD and no employees out of state. Our product are site furnishings. We do not install. All items are shipped to the other states. With this bid process a contract is usually signed before work begins. We recently were reviewing a bid in NC that requested information if were were authorized to conduct business in state. Thank you for your response in advance.

    • Nellie Akalp

      Hi Niki,
      Great question! Generally a foreign qualification is only required if the company has a physical address in another state, or has employees in other states. If you have any other questions, please give Katie Hendrix in my office a call for a free business consultation at 888.449.2638 x110.

  53. I have a 20% interest in a South Carolina LLP. The 80% partner has begun operating the business (an auto repo business) in Michigan. We are no longer communicating about the business and I have no means of tracking its activity. I need to know what responsibilities the business has as to filing, registering, in Michigan. Thank you for any help.

  54. Dear Nellie, this is a great article.
    Can you suggest something for me?
    I am going to start a partnership with 4 other individuals. 4 of us live in California, one lives in NY.
    We have been looking into starting a Wyoming LLC, because the yearly fees are drastically lower.
    As for the states we are doing business in, we are basically licensing products we come up with to mail order companies who in turn will sell our products and then pay us royalties, as well as selling music online digitally.
    I feel like we need to draft a partnership agreement, but should this agreement mention California, Ny or just Wyoming when we mention “governed by the laws of..” as we will use a registered agent to do all our business mailings, etc from Wyoming.
    thank you

  55. Hi, I am starting an online store selling apparel which we will design and manufacture in NJ and CA. Me living in NJ and my partner living in CA. What is the best state to LLC? Do we need to foreign qualify in the other state? Thanks in advance!

  56. I live in Maryland but own a rental property in North Carolina. I formed an LLC in NC for ownership of the NC rental home. I use another home I own in NC as the address for the LLC. I am getting ready to purchase a rental home in Lancaster PA that I would like to put under the ownership of the LLC. Do I have to register as an LLC in PA? I do not have an address in PA so what would I use as the official address to do business in PA?

  57. Hello, I work for a LLC in the state of Ohio.
    We perform construction, consulting, and management services.
    We have a customer that is based in the state of Ohio with multiple locations throughout the country.
    This customer would like to hire my LLC for construction administration, management services, and supervision; most if not all services are performed via on-line or telecommuting from Ohio.
    What are our tax obligations if this customer wants us to hire a local contractor in the state of Mississippi to furnish and install a new temperature control system on their existing roof mounted HVAC units located throughout their Warehouse in Mississippi?

    • Nellie Akalp

      Hi Paul,

      Thank you for your question. I would definitely recommend consulting an accountant or CPA regarding this. They would best be able to assist you and inform you as to what your tax obligations will be.

  58. Hi Nellie,

    My employer was based in NY but they filed a foreign certificate in CA, where I and a few other employees were residents. On the CA employees’ W2’s, we had CA and the company’s CA EIN listed, so the tax accountants filed taxes only in the state of CA, even though the source of income was from the employer in NY. Is that correct? NY is now coming back and asking for taxes owed by the individuals and saying that it doesn’t matter that CA was listed on the W2s, and that CA should issue a CA Resident Tax Credit for receiving a source of income from another state. Are you familiar with this type of issue? Thanks!

  59. Hello,
    I am a single owner/operator/driver for a semi trucking company in NY. I am operating under NYS authority. If I want to establish a DBA for a driver, with a physical address in Florida as well , can I do this legally with my current NYS authority, or do I need to apply for foreign business?

    • Nellie Akalp

      Hi Paul,

      Generally a DBA is required to have an address in the state where it is filed. If you have any other questions, or would like assistance with filing your DBA and/or foreign qualification, please contact Katie Hendrix in my office at 888.449.2638 x110 for a free business consultation!

  60. I have a internet only business, I have my LLC, in the state of Texas, where I reside. I do not have a tangible product. My website is managed from my residence, and I do not go to, nor do any of my clients come to my home. I host ads from all over (currently just the United States) on the web. Do I need foreign qualification in other states or over seas? (if I start hosting ads from over seas, on my website).
    Thanks in advance.

    • Nellie Akalp

      Hi Leon,

      Great question. Generally, a foreign qualification will be required specifically if the business has a physical address in another state, or if the business has employees in another state. If you have any other questions, please feel free to contact Katie Hendrix in my office at 888.449.2638 x110 for a free business consultation.

  61. Hi,

    I’m an app developer that only make apps for myself to upload to Google play a I do not do contract or in person development, I have a LLC in TX but now I moved to LA… Should dissolve the TX LLC and get a Louisiana LLC or is it okay to keep the TX LLC as its all online?

    • Nellie Akalp

      Hi Carter,

      Generally, yes that is what would be done. It’s recommended to have the LLC registered in the state where the business is physically located. If you need any assistance in dissolving and/or refiling your LLC, or if you have any further questions, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  62. My partner & I have an LLC providing engineering consulting services. The LLC is registered in PA & we both live in PA as well. We have a sole client with offices in CA & AZ for whom we provide the engineering services and all work is done at home in PA. We have no other employees or offices anywhere. All of our income is from this single client. Other than visiting AZ or CA for meetings, we dont do any work there.

    do we need to apply for foreign business in AZ or CA?

    Thanks
    Starks

    • Nellie Akalp

      Hi M. Starks,

      Typically a foreign qualification is only required if the physical address is located in another state, or if the company has actual employees in another state. Please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110 if you have any additional questions.

  63. Boy, this stuff is confusing. I sell on Amazon, through FBA; so Amazon houses my inventory in various states. Most of the sellers I know just LLC in Wyoming and have a registered agent, and do not foreign qualify in their home state. I live in MA; but my inventory is all sent into Amazon. Is it okay to do a Wyoming LLC and not foreign qualify in my home state?

    • Nellie Akalp

      Hi Shannon,

      If you have an address in Wyoming you can use as your business address, a foreign qualification will most likely not be necessary. However, if the business address you will be listing is in Massachusetts, chances are a foreign qualification would be required. If you have any other questions, please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  64. I’ve read through all the comments and haven’t seen a situation like mine. We have a three-member LLC that designs games, with the majority of work being done online, with two of us in TX and one in PA. The LLC was filed in TX. Because we have a member in PA, do we have “employees” in PA, which would mean we would need to get foreign qualification in PA?

    • Nellie Akalp

      Hi Heather,
      Great question. Generally members are not considered employees, unless they are being paid as such under payroll. If you have any other questions, please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x100.

  65. Hi i am a event planner and i travel to maryland, wash. dc and nova. I live and have a business address in va I currently have a shelf corp llc in the state of va where i bank and pay taxes (but no Income) and i also have a dba with a totally different name that i wanna service va, md and dc. do i need to inc. my dba in all three states or can i just link my dba to my llc and do business in md and dc?

    • Nellie Akalp

      Hi Gerri,
      Great question. Typically businesses are only required to be registered in the states where the business is physically located, or where that business has employees. If you have any other questions, please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  66. Hi Nellie, I have a moving company in Utah and sometimes get bids to move customers out of state. I’m wondering if we need business licences in each of these states. Based on the list of requirement above it is not our main source or revenue, we don’t have anyone working there and we aren’t having meetings with them regularly in these states, we spend maximum of one day in the state that we are moving them to. If you have and information please let me know
    Thanks!

    • Nellie Akalp

      Hi Cam,
      Great question. Business license requirements vary greatly depending on the specific cities and counties in which you are conducting business. Please feel free to contact Milton Turcios on our office for a free business consultation at 888.449.2638 x104, and he would be happy to assist you with that research.

  67. Hi Nellie!

    I just filed all of my paperwork for a new LLC in Delaware at the end of last year in December. I was unaware that I would then have to pay both in state Franchise taxes to Delaware as well as Federal taxes by April – I thought I’d have the year to straighten out all of the logistics! That said, I am currently located in Los Angeles and the business is all online. We’re offering no services or products as we will be launching only a social media site. Additionally, while I do work in the state at a different company (this business is a new venture), I use my home address for the business address and do not hold any meetings or sell any goods or services from that address. We also do not yet have any employees. My partner and I are in the red if anything, and don’t plan on making any profits in the first three years, short of a miracle. In a case like this, would I need to register for foreign qualification? Also, how would I go about paying Federal Taxes (whether I register for foreign aualification or not)? Lastly, would I also need a DBA in addition to the LLC formation? HELP! LoL Thanks in advance!

    Jack Mont

    • Nellie Akalp

      Hi Jack,

      Will you be doing business using a name other than the full, legal LLC name? If so, generally an DBA would be required. Feel free to contact Katie Hendrix in my office at 888.449.2638 x110 for a free business consultation, and she can assist you with filing a DBA. As far as your taxes are concerned, I would recommend speaking directly with an attorney or CPA, as they would be best able to assist you with those questions.

  68. Hello Nellie. I plan to form a LLC in New Mexico but have my principal place of business in Illinois.

    1. Do you think it would be better to just have an office in New Mexico and keep that as my principal place of business? If so, I could have them forward my mail to Illinois but that would be an added cost and I would be mailing items to clients from Illinois so would that be considered conducting business?

    2. If I kept Illinois as my principal place of business would I have to foreign qualify in Illinois? I was confused about that because it would seem as if I was already operating in Illinois without a LLC or would that mean that I am choosing Illinois as my principal place of business, that no business from that address has been conducted as of yet?

    • Nellie Akalp

      Hi Lisa,

      Generally, it’s recommended to file the business in the state where the physical business address is located. This will usually avoid additional filings, such as a foreign qualification. If you have any other questions, or would like assistance with filing your LLC, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  69. Hopefully an easy question for you here.

    I live in Florida and want to purchase an apartment in Maryland for personal use. If I set up a Florida LLC to purchase the Maryland apartment is this considered “doing business.”

    • Nellie Akalp

      Hi Seaver,

      You have a few different options as to how this can be set up. I would recommend speaking with Katie Hendrix in my office. She’d be happy to provide you with a free business consultation and can outline all your options for you. She can be reached at 888.449.2638 x110.

  70. Hi There

    I have a client whom is a dental professional. Their LLC was formed in Az and they wish to grow in Tx and use the same LLC and TIN. Will they be able to operate in TX under the same LLC and TIN in TX?

    • Nellie Akalp

      Hi Dana,

      Yes, this is a possibility. It would be a matter of filing a foreign qualification in the state of Texas. Please feel free to contact Katie Hendrix in my office, and she can answer any questions you may have as well as complete the filings for you. She can be reached at 888.449.2638 x110.

  71. What about road shows/doing expos?

    Say I’m domesticated in Hawaii, I travel to California to do a one time trade show selling retail product.

    Most venues require a “business license” which I’m thinking is a reference number for when I pay sales tax.
    But on their vendor forms, they never ask about “foreign qualifying.”

    Am I required to foreign qualify?

    I’m looking at doing trade shows and traveling promoting retail product, at what point in terms of my field, should I qualify?

    I was looking at Texas, I believe to foreign qualify cost around $750, but to open new entity cost $300.

    In Hawaii it’s less than $100 to open LLC and receive a business license.

    Instead of foreign qualifying I’m looking at opening a new LLC, with same name in Texas. Is there a advantage to having a “master LLC” with foreign LLC qualifcation. Vs opening a whole new LLC with the same name?

    • Nellie Akalp

      Hi Dennis,

      Generally speaking, a foreign qualification is only required when the business has a physical address in another state, ore employees in another state. Please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110. She can assist you with any filings, as well as answer any additional questions you may have.

  72. I am planning on forming an LLC in ohio. I will sell internet services, I will rent services from a provider in the cloud. I will have clients from across the country purchasing my services. Will I need to register in each state?

    • Nellie Akalp

      Hi,

      Generally a corporation or LLC is only required to be filed in the state where it’s physically located. Unless the business has physical locations or employees in other states, usually it’s not required to register elsewhere. If you have any other questions, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  73. Confused but enjoying the journey

    Hi! Great article! So my partner and I are LLC-organizing in Washington state with the Principal Office listed in the application as San Francisco. We are intending to utilize Fulfilled-by-Amazon to conduct business with our merchandise. We know that we’ll likely have to obtain seller’s permits (and, thusly, remit sales tax) to the states where the merchandise is/will be purchased. However, do we need to foreign qualify our LLC in CA or is this all under interstate commerce?

    • Nellie Akalp

      Hi,

      Great question. Generally, a foreign qualification will need to be filed if the company has a physical address (or employees) in any state other than the state where the business is registered. If you have any additional questions, or would like assistance with filing your foreign qualification, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  74. I am so happy you’re real. You’re calling our biz student(consult/research ctr.,back)and we are glad your are yes able to help a friend / colleague of ours with first DBA reasonable and you’re professional so thanks. we appreciate it. I myself just have 1 query on LLC
    do this cover my entire biz 100% if any dispute or anything arise,
    i don’t think it will since i monitor all work calls out and in,but just wondering
    i am fully protected,from personal assets right?thanks.
    bye now.

    Such a great site.

    • Nellie Akalp

      Hi Farantino,

      Generally speaking, a corporation or LLC offers liability protection by nature. Some business owners do opt to purchase insurance for additional protection as well. If you have any other questions, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  75. Hi Nellie,

    My business partner and I have separate companies that do business together at the moment but would like to create a new company as partners. The issue is that my business partner lives in Canada and I live in NY. What kind of business do I need to create to have partners living in different countries ? Would it have to be an international company ? Any help would be greatly appreciated!

    Thanks !

    • Nellie Akalp

      Hi Darren,

      Great question. You have a few different options here, which is why I think it would be best to speak with one of my business consultants on the phone. You can reach Katie Hendrix in my office for a free consultation at 888.448.2638 x110, and she would be happy to outline your options for you, and even assist you with the filings.

  76. Thanks for the information. We have a Construction business that frequently works out-of-state and so we are registered and pay taxes in many of these states. However, we also have a DBA that only operates as an online retailer for gear. Does the DBA have to pay sales tax in the same states as the parent company because we share a tax ID or is the DBA exempt for out-of-state sales because it has no presence in these states? Thanks!

    • Nellie Akalp

      Hi Lindsey,

      Great question. I would definitely recommend speaking with an accountant or CPA regarding this issue, as they would best be able to guide you as to the tax requirements for your specific structure.

  77. Hi Nellie, great article. I recently took over a company that was incorporated in PA. I am the only paid employee at this time, and moving to MD (for spouse’s job). All of our sales are in PA, or online. I will be physically located in MD, but our business is still online. Physical address of company will still be in PA, even no employees are there. Do we need to register in MD?

    • Nellie Akalp

      Hi Livingston,

      Great question. I think it would be beneficial to get a little bit more information from you in order to thoroughly answer your question. I recommend contacting Katie Hendrix in my office for a free business consultation at 888.449.2638 x110. She would be happy to outline your options for you!

  78. Hi Nellie,
    I’ve formed a corp in delaware which performs only online services for only south carolina residents and I live in los angeles. Do I need to file for foreign qualification in both CA and South Carolina or just South Carolina? THanks!

    • Nellie Akalp

      Hi Tina,

      Generally in situations like this, the company would usually need to be foreign qualified in the state where the business owner is physically located (not the customers). If you have any further questions or would like assistance with your foreign qualification, please contact Katie Hendrix in my office at 888.449.2638 x110.

  79. I am planning to open a business in 2 Years from now and want to Register my LLC well ahead of the time as I have the name and idea. I currently reside in Florida but will not necessarily start my business here. Please keep in mind that I will be expanding the business in other states as well. Most typical way is go with Delaware but do you see any future issues with that? I know you mentioned Foreign Qualification but is there any way of registering the LLC for all states?

    Apology for too many questions. 🙂

    • Nellie Akalp

      Hi Sean,

      Great question. Because you have so many different options as to how to structure this entity, I would recommend contacting Katie Hendrix in my office for a free business consultation at 888.449.2638 x110. She would be happy to outline your options for you, and even assist you with the business filings!

  80. We lived in PA and have a sole proprietorship operating from home offering consultancy services globally mostly over phone and e mail. We are now residents of FL. Should we register in FL or simply change the business address to FL.

    • Nellie Akalp

      Hi Natarajan,

      Generally it is recommended to have the business registered in the state where the business address / business owners are physically located. Please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638. She’d be happy to assist you with any questions you have, as well as file your sole proprietorship in Florida for you if you like!

  81. Nellie-I am a DC resident and owner of a virtual consulting DC Llc taxed as S Corp with three employees, including me. The other two employees work in VA and MD in their homes. All of the profits of the Llc come from the markup of these two employees’ hourly rates. Is that va and md income, or is it subject to DC tax since that’s where it’s incorporated? Totally confused. If not DC, is the corp subject to MD and VA state taxes for the portion of revenue made by the employee in each state?

    • Nellie Akalp

      Hi Amy,

      That’s a great question. I would definitely recommend speaking with an accountant or CPA, as they would best be able to outline the tax requirements specifically for your situation. Has your LLC been foreign qualified in the states of Virginia and Maryland? If not, please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110, and she’d be happy to assist you!

  82. Nellie – I am a resident in DC and have an LLC in DC that makes money in several other states (MD, VA, etc.). My LLC is registered and files tax reports in each of those states. However, my question is whether I must file individual reports in each of those states. Up to now, I’ve reported my flow-through income (losses) on the schedule K in my federal filing and then paid taxes for the gain or loss in my dc filing – because that is where my LLC is located.

    • Nellie Akalp

      Hi Ryan,

      Thank you for your question. I would highly recommend speaking with an accountant or CPA as they are best suited to assist you with your tax questions, and understanding what is require specifically for your LLC. If you have any other questions regarding business filings, please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  83. Hi Nellie,

    I plan to start an LLC to buy rental properties. I live in California but have no intention on buying properties here. Seeing as that I am not conducting business in California I do not need to incorporate here, regardless of my personal residence, is that correct?

    Second part of my question is do I have to incorporate, or file as “doing business as” in a state that I buy property. I will not be actively managing the properties, meeting with renters or interacting in any way in person. The properties will be managed by an independent management company. Could I, for example, incorporate in Nevada and have rental properties in Texas?

    Thanks so much for your help,
    Jason

    • Nellie Akalp

      Hi Jason,

      Generally a foreign qualification will be required if the business address is located in a different state, or if the owners/employees are located in a different state. In regards to a DBA, that’s typically only required if the company is operating under a different name than the full, legal LLC name. If you have any further questions or would like assistance with foreign qualifying, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  84. Hi Nellie,

    This is a great thread, and I’m very tempted to just call your office, I suppose each person has just a little twist on their situation to make it subtly different enough to require specific answers. You did just recently answer one for Amy that is extremely close to my situation, however my question actually deals part of your answer – that is, do I need to foreign qualify with each state I have an employee in, even if we have no sales or business in that state? Basically, they are remote workers, working from home for customers in other states, and/or they travel to other states. So in this case, while I want/need to register for withholding tax and state unemployment insurance, for payroll purposes, would I still need to file as a foreign corp in those states? (my current question is specifically about GA, though there are others, and from what I’ve heard so far, it can really vary by state)

    Thanks,
    A G

    • Nellie Akalp

      Hi Ari,

      Thank you for your question! You’re absolutely right – everyone’s situation is a little different and I would definitely encourage you to call Katie Hendrix in my office at 888.449.2638 x110 for a free business consultation. She would be happy to lay out your options for you!

  85. Levie Williams IV

    I am planning to open a security firm, but i am not currently in the state that I would like to start the business, and will not start actually delivering service until i am there. My issue is that i want to register my company ahead of time, but because i don’t have a physical address in the state i can’t register there. So, i thought of registering my LLC in my current state, but will not do any business yet. Will i still need file a foreign qualification to conduct business. I just really want to secure and trademark my company and get as much as i can ahead of my move.

    • Nellie Akalp

      Hi Levie,
      What state were you hoping to file the business in? Depending on the state you’re interested in filing in, you may or may not be able to file the company there without a local address. Please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110. She would be happy to outline your options for you! 🙂

  86. I’m a sole proprietor and have a business license/sales tax in CA. I have no employees – just me – no physical store and everything is done online. I will be moving to NV and living there for a span of a year or less then I will be moving back to CA permanently. During that time frame, I may occasionally go back to CA to speak with showrooms or purchase merchandise. If a customer has placed an order on my website and I ship their order from NV, do I need to charge them NV sales tax? Will I need to apply for foreign qualification? Will I need to pay taxes to both NV and CA or am I able to keep everything CA-based as I will be back in CA before the end of the year. What if the return label or receiving returns are in CA and only mailing out packages is in NV. I hope you were able to follow this. Thank you! I really appreciate it!

    • Nellie Akalp

      Hi Lauren,
      Great questions. Because your situation is a little unique and you have a few different options, I think it would be best if you spoke with Katie Hendrix in my office on the phone. She’d be happy to provide you a business consultation for free and outline all your options for you. She can be reached at 888.449.2638 x110. Do keep in mind that all tax-related questions would be best suited for an accountant or CPA.

  87. Hi Nellie,

    I own a cleaning service in Washington. Recently I received a bid request from a company that does construction in Washington and Oregon for post construction clean up on a job site in Oregon . If I do an occasional job for this company in Oregon (maybe once every month or two), do I still need to file for a foreign qualification with Oregon since the majority of my work is still in Washington and I have no location or anything in Oregon?
    Thank you for your time!

    • Nellie Akalp

      Hi Erin,

      Generally the rule of thumb is that a foreign qualification is only required if the business has a physical address in another state, or employees in another state. If you have any further questions regarding this matter, please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  88. Hi Nellie.,

    This article is great! I have read through all of the previous comments but have not found a situation that will match my own.

    I and a partner own an LLC in CO, live in CO, and have our office in CO.

    We want to travel across the country doing service work for other companies. Though we will not be setting up offices anywhere else, we ourselves will be physically present in other states for a few days whilst we perform or tasks.

    I am confused about the whole “physically present” and “have employees in other states” parts. We will not have a physical location in…say…Texas. Nor will we be hiring anyone who lives in Texas. So, if I went from Colorado to Texas to perform some service work for a few days at the customers location, would that require me to register?

    Thanks for your help.

    • Nellie Akalp

      Hi Martin,

      Being that there are no physical addresses or employees outside of the home state, a foreign qualification would usually not be required. However, keep in mind that different cities/counties/states will have different requirements for conducting business. I may recommend speaking with an attorney regarding your specific situation as there can be varying requirements.

  89. hi nellie

    im looking to bring my business to the usa, we are registered in the UK and Australia.
    We are an international recruitment company and have had some businesses in the US ask us to help with staff there.

    Im looking to register the company there but the companies we deal with are in Florida, California and Texas.
    How would i go about registering our business in this case?

    I would only probably be in the states 2 months of the year, the rest of the time would be dealing online and on the phone

    • Nellie Akalp

      Hi Lenny,

      The business can be registered in whatever state you choose, however, keep in mind that there are some states that will require that the business address be located in that state. Please feel free to contact Katie Hendrix in my office at 888.449.2638 x110 for a free consultation. She would be happy to outline your options for you!

  90. I was wondering, if my friend has a company incorporated in Ohio and he’s thinking about opening a branch in Florida with me running it… Do we have to file for foreign qualification? Or do we need to file for everything here? I.e. Licensing and what not…

    • Nellie Akalp

      Hi Tom,
      Generally speaking, if your friend was wanting to open another branch in the state of Florida he would need to do a foreign qualification. This would allow him to operate the business in both states. In order to fully operate the business the appropriate licensing’s and permits would be required in each state. If you have any further questions please feel free to reach out to my team at 888-449-2638 X109 and ask for Chava

  91. Good day!
    Thank you for the article. Very helpful!
    I have one question. My company registered in DE. I am in trucking business. As for the moment I use my NY address as mailing for the company. I do not conduct any business within the State of DE or NY. To which State I have to pay state taxes?
    Thank you

    • Nellie Akalp

      Hi Sam,
      Great question. I cannot give you tax advice however Delaware does not have a state income tax. They do have a franchise income tax that one would pay. Whether you owe the state of NY should be determined by an accountant.
      If you have any further questions please feel free to reach out to my team at 888-449-2638 X109 and ask for Chava

  92. Nellie,

    I have a registered business (LLC) in NH and I am looking to do business with a Maryland company. They told me that I do need to register with State of Maryland before I can become a preferred vendor. What will registering in the state require in the way of sales and income taxes as well as reporting?

    • Nellie Akalp

      Hi Allison, thanks for reading and commenting! In response to your question, as an LLC registered in the state of NH looking to do business in the state of Maryland with a MD company, one will need to foreign qualify the NH LLC in the state of MD as a foreign LLC . The state of MD will require one to file the NH LLC as a foreign LLC in the state of MD and once set up, all the MD rules re sales income and taxes will apply and one will have to file taxes in the state of MD as a NH foreign LLC. If you need assistance, my company CorpNet can assist you with the set up and registration of the NH LLC in the state of MD as a foreign LLC Call 1-888-449-2638 ext 105 and ask for Amanda Beren for a free business consultation!

  93. Hi I have an LLC partnership set up in NJ with my office being in NJ and all for right now being done out of there. We are looking into hiring independent contractors in NY, there will be no office there as all business will be conducted in the NY individuals homes. We are not sure if we have to register in NY or what paperwork we may need to fill out in order to begin business there.

    • Nellie Akalp

      Hi Maria:
      Thank you for your inquiry, in response to your inquiry, as an LLC registered in state of NJ looking to do Business in the state of NY, one will need to foreign qualify the NJ LLC in the state of NY as a foreign LLC . The state of NY will require one to file the NJ LLC as a foreign LLC in the state of NY even if dealing with people working from home. Once set, all the NY rules re sales income and taxes will apply and one will have to file taxes in the state of NY as a NY foreign LLC. If you need assistance, my company CorpNet can assist you with the set up and registration of the NH LLC in the state of MD as a foreign LLC Call 1-888-449-2638 ext 105 and ask for Amanda Beren for a free business consultation!

  94. Hello,

    If I form a company in Michigan but I later also have a Foreign Qualification in California; does that mean i will be taxed at the California State Tax rate for the operations/sales in California? Or Foreign Qualification is only a kind of declaration; which in turn means that I will be taxed as per tax laws of Michigan?

  95. If my company is shipping spare parts and machinery to different states do I have to file with the secretary of state in those states if I’m not collecting sales tax?

  96. I plan to start a consulting and service business (LLC). I live in Texas and my physical presence (office) will be in Texas. I plan to offer services to clients anywhere in the US and global. In providing the services I will typically travel to the client location (state or country), and may also travel with them to another location (state or country) where they have interests. I won’t know where (states or countries) I am going to be providing services until a potential client contacts me. Sometimes a service trip will be a day or two, and sometimes several weeks. Do I need to qualify the LLC in all 50 states just so when a potential client calls out of the blue I am ready to go?

    • Nellie Akalp

      Hi Paul,
      Generally a foreign qualification will only be required if the company either has a physical location in another state, or employees in another state. If you have any further questions about foreign qualifying, please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  97. I have a question that I didn’t see an answer to already.

    I started a staffing agency in Florida and will be providing workers to New York and Massachusetts. They will work on temporary contracts but will pay State taxes on their income. Do I have to register as a foreign entity if I don’t have a physical location there?

    • Nellie Akalp

      Hi Angela,
      Will the company have a physical address or employees in any states other than Florida? These are the main reasons a foreign qualification would be required. If you have any further questions about foreign qualifying, please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  98. I have a question, My client is doing business in IL and now wanted to establish business in other states Iowa, Michigan & Wisconsin. The IRS is register with IL under one TIN. My client is not interested to create any new entity for each state and wanted to use the same old Entity in all states.

    Is it possible to use the same TIN for multiple state business.

    Need suggestions.

    • Nellie Akalp

      Hi Kamal,
      Yes, this can be accomplished by foreign qualifying the Illinois entity in Iowa, Michigan, and Wisconsin. Please contact Katie Hendrix in my office, as she will be able to complete these filings for you. She can be reached at 888.449.2638 x110.

  99. Hi,

    I have an LLC registered in Delaware, Can I register a DBA in Ca at the country level and start operating in California, or I need to register a foreign LLC in California first to be able to operate in CA.
    I don’t have an office in Ca, however i operate from my home.

    Please advice.

    • Nellie Akalp

      Hi Zach,
      When filing a DBA underneath an LLC, the DBA must be filed in the same state as the LLC. Usually, in this instance a foreign qualification would need to be registered in the new state. If you would like assistance with these filings or have any additional questions, please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  100. Hi,

    I was interested in opening a franchise for a retail company that is based out of NY, which is where I am currently located. However, the franchise is a pop-up shop. Because my current location is not a busy area, I was interested in turning the business into a traveling pop-up shop. Since I would not be operating the business for more than 1-3 days in each state, I was wondering what legal actions I would need to take. Any help is greatly appreciated. Thank you.

    • Nellie Akalp

      Hi Micayla,

      Generally it is recommended to file the corporation or LLC in the state where the business owner(s) have a physical address. However, there may be additional steps that could potentially be required. Please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  101. We are certified installers of an awning product. Our company is located and registered in NY. We have been asked to do an installation in NC. Do we need to register in NC?

  102. I’m working on homework for a law class and was given the following scenario: Company A operates in Arkansas but never actually registered to do business there. The president of Company A entered into a contract with Company B to design sets for an upcoming movie in Tennessee. However, Company A failed to perform its contracted obligations, resulting in a lawsuit brought on by Company B against Company A in Arkansas.

    Is Company A considered a foreign company in both Arkansas and Tennessee? Does Company A have any defense to this lawsuit? Will Company B win the suit? I’m having a hard time coming up with the verdict and justification in this case. Thank you in advance!

  103. My small business LLC physical location is based in NC. Employees so far I have working for this company work in NC locations.
    This is a software consultancy services provider company. Recently, I got a contract from a company in Georgia requesting a consulting resource work onsite at client in Georgia.
    Do I have to register my company in state of Georgia? since the client and my employee both located in Georgia. But I have no physical company office in Georgia?

  104. Nellie Akalp

    Hi Anoop,

    The general rule of thumb is that if the business has a physical address and/OR the business will have employees in another state other than the home state, a foreign qualification is usually required. If you would like assistance with this process, or have any additional questions, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  105. I own a Website Management and Development Single Member LLC. I have no physical address as everything I do is over phone and internet. I can work wherever internet is present. When I registered my business in Utah I had to have an address, so I was told to use my apartment address. I have now moved to Virginia. Should I change the address under the business listing to my Virginia address? Is it possible to have no address associated with a single member LLC license? Do I need to register a foreign LLC in Virginia? I’m a little confused about all this.

    • Nellie Akalp

      Hi Kaytlynn,

      Generally a corporation or LLC is required to be in the state where the business and business owners are physically located. Registering a foreign LLC in Virginia is an option, but in that case, the LLC would be registered in both Utah and Virginia. Another option would be to close the entity in Utah and refile in the state of Virginia. If you have any other questions, or would like assistance with these filings, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  106. I’m thinking of starting a business with my sister. The situation is, she lives in NC- I live in SC. We would more than likely be filing our LLC in SC. This would primarily be an online business, however we could potentially sell our goods in person in both states, not a significant amount. Would we need to foreign qualify for the possibility of having in person sales?

    • Nellie Akalp

      Hi Heidi,

      Thank you for your question. Generally a foreign qualification is required in a situation where either the physical business address is located in a state other than the state of registration, or if there will be employees in another state. If this is something you’d like to pursue, or if you have any other questions in regards to foreign qualifying, please contact Katie Hendrix in my office at 888.449.2638 x110.

  107. Hi Nellie,
    I am a California S-Corp. As a PR and marketing company, my business comes from clients of many states. I am thinking of moving to Las Vegas. Will I need to make any changes if I move from California?

    Thank you.
    Lisa

    • Nellie Akalp

      Hi Lisa,

      In most cases, when the owner of a business moves to a new state, the business’s physical address also moves. Generally speaking, it is usually required for a corporation or LLC to be registered in the state where the physical address is located, whether it be registered domestically, or foreign qualified. If you’d like assistance with either of these processes, or have any questions in regards to this, please contact Katie Hendrix in my office at 888.449.2638 x110.

  108. Hi Nelie,
    I have rental property in NC and FL. I live in CO and own my home. My income from the rentals is acturally deposited in a bank in Austin TX
    i want to protect my assests thru an LLC.
    Does this count as doing business in each state an thus require a foreign quilification in each state?

  109. Hi Nelie,
    If a Cosmetology school and salon has a LLC registered in VA. Should they have a Foreign Quilifiation in Maryland if they are conducting Pop-up salons and alternate locations for the cosmetology school in Maryland?

    • Nellie Akalp

      Hi Toni,

      Generally speaking, a foreign qualification will be required if the business has any physical addresses in other states, or employees residing in other states. If you have any additional questions, please contact one of our Business Filings Experts at 888.449.2638.

  110. Hi Nellie,
    I have a small communications company in Az, we are being asked to do a few small installs in Nevada. Basically means sending an employee from Az to Nevada for a couple of days. Do I need any kind of license to do such small project?

    • Nellie Akalp

      Hi Robin,

      I would recommend contacting one of the Business Filing Experts in my office at 888.449.2638. They can go over your options with you, as requirements vary from state to state, business to business, etc. We look forward to hearing from you!

  111. Hi Nellie,

    Where can I find the taxes applicable to income, sales, and value of inventory in each state? I want to open stores in two different states.

    Thank you

    • Nellie Akalp

      Hi Javier,
      Thanks so much for reading and commenting. In order to find the taxes required in your state, the Department of Revenue and/or Taxation would be able to assist and give you the information required. Please note that the name of the government agency may vary state to state. Hope that helps!

  112. Hi Nellie,

    Thanks for a great article! It has given me some good insight as to some of the legal questions I need to answer.

    I live in Washington state and own land in Texas. Myself, my daughter (who lives in Washington state), and my mother (who lives in NC) want to form an LLC, build a cottage on the Texas land and rent it out. We will all be investors and on the LLC board of directors. However, I will be doing the majority of the work and actively managing the cottage both from Washington and from Texas (We have and RV and hope to spend time down there). While in Washington, we will use security cameras, wifi coded gates and door locks, and 1099 contractors to clean the cottage after each use. We plan to use airbnb to rent it out.

    I believe I need to create the LLC in Texas. Do I need to have a foreign qualification in Washington? What about NC where my mom lives?

    Thank you so much!
    Debbie Shaver

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