Doing business in other states is also called foreign qualification.  Foreign doesn’t refer to international business, it means operating within the United States but outside the state in which your business is incorporated. 

If you incorporate in Nevada, your limited liability company is considered domestic only in Nevada and considered a foreign LLC in other states. 

You may need to foreign qualify if you are considering incorporating in a state other than your home state. Different states have different criteria and many factors are used to determine the need to foreign qualify.  Ask yourself these questions:  does your company have a physical presence in the state?  Have employees in the state?  Accept orders in the state?  Have a bank account in the state?

If the answer is yes to any of those statements it is likely you will need to foreign qualify.  If you have any questions about conducting business and whether or not you need to foreign qualify your business, contact me and I’ll help you navigate these sometimes complicated waters. You can reach me at 1-800-648-0966 or mstein@laughlinusa.com.

In order to conduct business in a state other than your ‘domestic state’ you need to register for a Certificate of Authority.  If you will do business in more than one state you need to do the same for every state.  Your business will be required to continue to pay state fees and be subject to on going reporting requirements.

There are consequences that could be very severe if you fail to foreign qualify.  Your business could face penalties and back taxes for the time you were operating without being foreign qualified.  Although there are additional costs to becoming foreign qualified in other states the process is necessary. 

If you are considering incorporating in a state other than your home state Laughlin Associates can help you.  We offer personalized services and are with you every step of the way.  When you have questions you can call and speak with a business consultant.  We understand that when you own your own business things may come up to cause you to have concerns. That’s why we offer incorporation services for whatever part of the process you are in.  Let us work with you one on one to help you to properly incorporate your business.

You can contact me at 1-800-648-0966 or at mstein@laughlinusa.com.

When considering a business entity, people are most familiar with the corporation. It is by far the oldest form of business entity literally going back hundreds of years. And that is one of the main reasons corporations are attractive to people interested in the formation of a business structure. Aside from the abundance of case law and precedent, the C corporation, which is the way all corporations are born, has more benefits and deductions than any other entity type. It is a separate taxpayer as well and so allows for the possibility of splitting income between it and the owners or other business entities.

The S corporation on the other hand can be elected simply by filing a form called the 2553 and is a corporation that the IRS allows to be a pass through entity and is therefore taxed at the owner(s) rate, a property which makes it a little easier and a little cheaper to maintain than the C corporation. One of its principal benefits is the reduction of self-employment tax, and so it is a very popular form of business with business owners and accountants.

The recommendation generally is for the corporation to be engaged in a traditional kind of business; I do not advise the corporation, either C or S, to hold an asset that may either appreciate or depreciate as it would generate a negative tax consequence for the company and possibly the owners. A C corporation has several different ways for double taxation to come into play, and even though an S corporation cannot be double taxed, it very often would cause higher taxation when assets are being held. Remember, as a rule of thumb, the corporation is a time tested and strong asset protection and tax reduction tool when used for a business purpose.