Once you see your limited liability company (LLC) growing, you may start considering ways to reach a wider audience. A strategy that many business owners try is expanding their operations to a new location.
Understanding Foreign Business Entity
If you want to do business in another state, there is no need for you to form a new company. What you can do is register as a foreign business entity.
Foreign, in this case, does not refer to international companies. To put it simply, it refers to a business entity that wants to operate in a state other than where it was originally formed. For example, you started an LLC in Alabama. If you want to do business in Ohio, you will have to register as a foreign LLC.
When To Register
What you have to understand first is the concept of transacting business in the state. Generally, there are various factors to take into consideration to find out if your company needs a foreign qualification.
While there may be no specific definition in the LLC Act of Ohio as to what constitutes transacting business, you will have to register if your activities in the state are any of the following:
- Your LLC maintains a warehouse in the state.
- You have a store located in Ohio.
- Your company has an office based in the state.
- You have a sales representative in Ohio.
If you do business in Ohio but not register your company as a foreign LLC, your company will face certain consequences. For example, your LLC will not be able to bring a lawsuit in any courts in Ohio.
The Foreign Qualification Process
If you organized your company as an LLC and are doing business in more than one state, then you will have to register your LLC in all the states where you operate. However, the process may vary per state. That means you will have to follow the requirements of each of those states.
Here are the steps you need to take to set your foreign company in Ohio:
- Step 1: Check the availability of your company name. Like other states, Ohio also has naming guidelines. You have to make sure that your LLC name is distinguishable. You may have to perform a business name search to find out if no existing entity in the state is using the original company name of your business.
If it is already taken, you will have to use a different name. In that case, you have to register a doing business as (DBA) name with the Secretary of State. That will be the name you have to use for all of your transactions in Ohio.
If your company name is available, you can choose to reserve it to prevent another entity from taking it. Apply for name reservation and pay $39. Doing this will reserve your company name for 180 days. The state does not require this step, so you can skip it if you want.
- Step 2: Nominate a registered agent. The state requires all businesses, whether domestic or foreign, to have a registered agent. This is an individual or a business that serves as the representative of your LLC. Their main task is to accept all government correspondence and business-related documents on behalf of your company. Those may include notices of lawsuits, services of process, tax information, and communication from the Secretary of State.
When choosing a statutory agent, you have to make sure they are qualified. The state has provided a detailed breakdown of the requirements.
- If you appoint an individual:
- A natural person who is a resident of the state
- At least 18 years old
- Has an address in Ohio that will serve as your registered office
- Is always available in the said address during regular business hours
- If you nominate a commercial registered agent:
- Has a business address in the state
- Has a good standing status with the state
- A domestic or foreign corporation, nonprofit corporation, LLC, partnership, limited partnership, limited liability partnership, limited partnership association, professional association, business trust, or unincorporated nonprofit association with a business address in Ohio
- Authorized to transact business in the state
- If you appoint an individual:
- Step 3: File the necessary documents. To formalize your company’s foreign qualification, you will have to file a Registration of a Foreign Limited Liability Company with the Business Services Division of the Secretary of State. It comes with a $99 filing fee.
When filling out the form, you will have to disclose the following information:
- The state where you originally formed your LLC
- The date when you organized your business
- The official name of your LLC in its home state
- The company name you will use for your Ohio operations
- A name and address where interested parties can submit requests for copies of LLC documents, such as the operating agreement
- The name and address of your Ohio registered agent
- A statement expressing the company agrees that service of process and other legal filings will be sent to its registered agent and that the Secretary of State will accept services of process if the agent cannot be located
- Signature of one or more authorized representatives
The Business Services Division normally takes approximately 4 to 5 business days to finish processing documents. The division offers expedited service for an additional payment.
- 2 days – $100
- 1 day (for walk-in only) – $200
- 4 hours (for walk-in only) – $300
Setting Up A Foreign LLC With Ease
The foreign qualification process in Ohio can be time-consuming. Instead of focusing on growing your business further and managing your company’s day-to-day operations, you may have to take some time off from your busy schedule to take care of the requirements.
If you want to set your foreign business up with ease, the best option is for you to hire a reliable third-party organization like DoMyLLC. Contact us today to learn more about our services.
Business Filing Section