Limited Liability Company: The Difference Between Foreign and Domestic LLC
If you’re reading this article, you probably already know that LLC stands for a limited liability company and building an LLC is a wise move for smaller industries. What you may not be aware of is how operating an LLC in more than one state may affect your company. In specific states that recognize LLC as a business entity, there are fundamentally two forms of LLC – the foreign and domestic. But, contrary to what you might think, a foreign LLC doesn’t primarily originate in a different country: it originates in another location.
What Is a Foreign LLC?
In general, the foreign LLC is built in one state but also does business in one or more other states. It’s subject to the laws of each state in which it does business, but tax standards and other laws in a specific state may be more beneficial to the LLC and some companies pick to build themselves in states that offer the best advantages.
If you’re doing business in more than one state, you are required to register in each. A state in which you first build your LLC and start doing business is considered your domestic LLC and the LLCs in all other states where you do business are registered as foreign LLCs. Failure to register your LLC may result in penalties and fines in the foreign state.
Registering a foreign LLC is similar to registering a domestic one. An associate of the LLC registers the company with the Secretary of the State in the location in which it wishes to do business and pays the corresponding charges. Most states have different forms for filing domestic versus foreign LLCs.
What Is a Domestic LLC?
The domestic LLC is defined as a Limited Liability Company that operates in the state where it was established. Even if the LLC decides to do business in other states as a foreign LLC, they’ll be regarded as domestic in their home state. Doing business in another location means your LLC:
- Sells services or products in the state through an agent, manufacturer’s representatives, or distributors
- Has business bank account in the country
- Maintains a manufacturing facility, distribution facility, retail outlet, or an office in the state
- Transacts business or holds discussions in the state
- Owns real estate or personal property in the state
Building Your Domestic and Foreign LLCs
Forming LLCs in various states may seem like a headache, but Windsor makes it easy with their simple LLC packages. Simply use the drop-down menu on Windsor’s LLC order form to find the state in which you want to build your LLC. Why worry about building your LLC, when Windsor is here to walk you seamlessly through the process? Fill out the convenient online form and put your LLC on the road to success with Windsor!
There are plenty of job opportunities for lawyers out there if you don’t mind confirming to company standards and working long hours with whatever clients have appointed to you. But if you want the versatility of handling your own schedule and working from anywhere, with clients of your own accord, then building your own law firm may be a great path for you! Try visiting https://windsorcorporateservices.com/form-an-llc-in-ny/ to learn more about LLC.