Seeing the business grow is a dream come true for entrepreneurs. When that happens, you may start thinking of ways to widen the company’s reach. One way of doing that is through expansion.
But deciding to do business in a different state is not enough. You have to register the business in all states where you wish to operate. If you formed your limited liability company (LLC) in another state, you have to register as a foreign LLC in Indiana to ensure that all transactions are legal.
What It Is
A company is considered a foreign LLC in Indiana if it was formed in another state. In this case, the term foreign does not refer to a company from a different country. It means that you organized your LLC under the laws of a state other than Indiana.
According to the LLC Act of Indiana, all foreign companies need to register if they are transacting business in the state. While Indiana does not have a specific definition as to what transacting business refers to when it comes to foreign companies, other state laws governing foreign LLCs provide some guidance.
Under said laws, you can consider a company transacting business in Indiana if it has a physical presence in the state. It can mean any of the following:
- Having a warehouse in Indiana
- Owning a store in Indiana
- Maintaining an office in the state
- Having a sales representative in Indiana
Exempted Activities
It is also important to note that not all activities can be considered as transacting business in Indiana. There are certain exemptions specified in the LLC Act of Indiana. So, if your company’s activities are any of these, you do not have to foreign qualify.
- You are settling or defending a lawsuit.
- You are dealing with internal affairs, such as holding manager or member meetings.
- You are maintaining a bank account in Indiana.
- Your company has an office, agency, or people in Indiana who handle the business entity’s own securities.
- You are only selling through independent contractors.
- You are obtaining or soliciting orders wherein the orders need acceptance outside of Indiana before becoming contracts.
- You are trying to make loans or acquiring indebtedness, mortgages, or security interests in a property.
- You are collecting debts.
- You own real or personal property.
- You are doing an isolated transaction that will be completed within 30 days and does not constitute repeated transactions.
- You are doing business in interstate commerce.
The Indiana Foreign Qualification Process
The process and requirements for foreign qualification depend on the state. A foreign LLC that wants to transact business in Indiana has to file an Application for Certificate of Authority of a Foreign Limited Liability Company with the Business Services Division of the Secretary of State. The filing fee is $90. You can submit either by mail, online or in person.
Additionally, you should also attach an original copy of your LLC’s Certificate of Existence from the state where you organized your business. Some states refer to this document as the Certificate of Good Standing. Make sure that the certificate is current and issued within the last 60 days. This document will serve as proof that your LLC exists in that state and that it is in good standing.
To complete the application form, you will need to disclose the following pieces of information:
- Business Email Address
- Return Address
- Legal Name of the LLC
- Alternate name, if the legal name is not available
- Entity Type
- Street Address
- Registered Agent Information
- A Statement that the Registered Agent Consented to the Appointment
- The Date you Organized your LLC
- The Duration of the LLC, which can be perpetual
- Whether your LLC is Member-Managed or Manager-Managed
- Name and Signature of Authorized Representative
After submitting the paperwork, you can expect the Business Services Division to finish processing your documents within 5 to 7 business days.
Appointing an Indiana Registered Agent
All companies that transact business in Indiana need to nominate a registered agent. You can select an individual or hire a third-party organization that will agree to accept service of process, legal correspondence, tax notices, and other important business mail on behalf of your LLC.
Your Indiana registered agent needs to have a street address in the state. A P.O. box will not do. They should always be available during normal business hours, which is from 9 AM to 5 PM. If you choose an individual, s/he has to be at least 18 years old and is a resident of Indiana. If you opt for a commercial registered agent, make sure that they are authorized to transact in Indiana. Check out this article to learn more.
Biennial Business Entity Report
Once you successfully foreign qualify your LLC in Indiana, you will have ongoing obligations. Your LLC has to file a Business Entity Report. It is due every two years. Your deadline will be the last day of the anniversary month of your Indiana registration. The filing fee for paper submissions is $30, while online filing costs $22.40.
Consequences of Not Foreign Qualifying
The foreign qualification process is your way of asking permission to transact business in Indiana. Failure to register will have negative implications. Your company will be prohibited from proceeding or taking action in an Indiana court. You will also have to pay for all fees and taxes that you have accrued while your LLC operates in Indiana. Additionally, your LLC will have to pay a civil penalty that may reach up to $10,000.
Getting the Right Support
Registering as a foreign LLC in Indiana requires you to submit formal paperwork and complete multiple steps. For a business owner, this whole ordeal may be a bit time-consuming. Additionally, you will also need to understand each step to prevent making any mistakes.
Fortunately, this is something that you do not have to do on your own. You can turn to a third-party organization like DoMyLLC. Our team of experts can make the experience less hassle for you. We can also serve as your LLC’s registered agent.
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