Foreign LLC In Florida: Here's What You Need To Know
When your limited liability company (LLC) starts growing, you may begin to wonder about the ways you can reach more clients. One of the things you may be considering is expanding your operations to different states. Doing this will open new opportunities for your company.
However, it is not as simple as choosing the location. Each state implements its own laws for businesses. You may have to get a foreign qualification in every state you wish to do transactions as a foreign LLC.
Understanding Foreign LLC Qualification
A common misconception that many people have is that foreign qualification is for businesses that originate in other countries. It may be due to the word “foreign,” but that is not the case. If your company is operating in a state other than the one where you originally formed it, then you will need to register it as a foreign LLC.
Let’s say you want to do business in Florida, but that is not your company’s home state. You will need to complete the foreign qualification process to legalize your operations in this second location.
You may be wondering when it is necessary to register your foreign LLC in Florida. Generally, it is a requirement if your company has a physical presence in the state.
- Your LLC has an office or other establishments in Florida, such as a warehouse or a store.
- You have employees, representatives, or agents who do business transactions in Florida on behalf of your LLC.
- Your company assembles, installs, or repairs products in Florida.
- Your LLC delivers goods to customers in Florida using a company truck.
In certain cases, some LLCs may be subject to some state business taxes. For those businesses, foreign qualification will inform the state that they will fulfill those obligations. Otherwise, they will face penalties. You can check if your company falls under this category by visiting the website of the Department of Revenue (DOR).
On the other hand, not all activities qualify as doing business. If the only transactions that your company does in Florida are any of the following, then foreign qualification may not be for you:
- Settling a legal proceeding in a Florida court
- Actions related to internal affairs, such as holding shareholder meetings
- Maintaining a bank account in the state
- Transferring or exchanging securities that the LLC owns
- Selling through independent contractors
- Soliciting orders outside of the state before they become contracts
- Securing or creating debts
- Transactions under interstate commerce
- An isolated transaction that you have completed within 30 days and is not part of a series of similar activities
- Owning personal or real property
- Controlling a subsidiary company that operates in Florida
Repercussions If You Fail To Foreign Qualify
Registering your LLC as a foreign business entity in Florida will give you permission to operate in the state. Therefore, you will have to face some consequences if you fail to go through the necessary process. These include the following:
- Your company will not be able to maintain any proceeding or legal action in Florida court.
- You will face penalties and fines for the fees that you would have paid while operating in Florida had you registered your company properly.
- The state will charge your company an additional $500 to $1000 as a civil penalty for every year, or part thereof, that you have done business in Florida without proper authorization.
Steps To Follow
If your company seeks authorization from the Department of State, then you will have to go through a multi-step process.
- Conduct a business inquiry. The first thing you need to do is to find out if your LLC name is available in Florida. If another business entity is already using it, then you will need an alternative or a fictitious name. You also need to follow the naming regulations of the state. Your LLC name has to have the words “Limited Liability Company” in it or abbreviations like LLC or L.L.C.
- Appoint a registered agent in Florida. It can be an individual or a company that will serve as the point of communication between your company and the state.
- Fill out the Application by Foreign LLC for Authorization to Transact Business in Florida. You can download a copy of this form online. Once you complete the form, submit it to the Registration Section of the Division of Corporations of the Department of State online, in person, or by mail. You should also include a cover sheet and a Certificate of Good Standing or Existence from your company’s home state. Make sure this certificate is no more than 90 days old. The registration comes with a $125 filing fee.Here are the pieces of information you will have to prepare to complete the forms:
- Cover Letter
- LLC name
- Name of the individual who will receive correspondence regarding the foreign qualification filing
- Complete address of the company
- Contact information
- The type of filing fee
- Application Form
- The name your LLC uses in its home state
- Jurisdiction under the law under which the LLC is organized
- Federal Employer Identification (FEI) number, if applicable
- The date when your LLC conducted its first business transaction in Florida
- Principal office address
- Mailing address
- The name and street address of the registered agent
- The name, title, capacity, and address of all the managers of your company
After completing the filing process, you will receive a letter of acknowledgment. However, you have to give the Department of State around 2 to 4 working days to process online submissions. Meanwhile, the division will process mailed or faxed documents for around 5 business days. If you file in person, the processing of your documents will end within the day.
Getting Help From Experts
Starting a foreign business entity in Florida can be time-consuming. Additionally, you will also need to research and learn the process to avoid mistakes. Our team of experts at DoMyLLC can make the experience less of a hassle for you. Contact us now to learn more about our services.
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