What Is NC Foreign LLC Registration?
If you own a LLC that was formed in a state other than NC, you'll need to register or qualify that business in NC if you want to do business there.3 min read
2. What Is North Carolina LLC Foreign Qualification?
3. North Carolina Foreign LLC Registration Exemption
4. North Carolina Foreign LLC Registration Process
What is the NC foreign LLC registration process? If you own a limited liability company (LLC) that was formed in a state other than North Carolina, you'll need to register or qualify that business in North Carolina if you want to do business there.
What Is a Foreign LLC?
Just because you're legally eligible to do business in one state doesn't mean that you're legally qualified to do so in every state. If your registered LLC is looking to do business in a state other than your home state, you'll most likely need to register with the state that you're looking to do business in.
Registering your LLC in North Carolina will ensure that you're conducting business legally there. For example, in North Carolina, all LLCs that have been formed in another state are referred to as foreign LLCs. The term foreign doesn't indicate that the LLC is from a foreign country. Instead, it indicates that the company was formed under the laws of a different state.
A domestic LLC is formed in the state in which it is doing business. For example, an LLC formed in Illinois is a foreign LLC in Iowa. All LLCs looking to do business in another state must register with that state's Secretary of State (SOS) to qualify as a foreign LLC or corporation.
What Is North Carolina LLC Foreign Qualification?
The procedure for registering as a foreign LLC in North Carolina is referred to as the North Carolina LLC Foreign Qualification. The process for forming a domestic LLC in North Carolina is almost identical to forming a foreign LLC. The original documents that established your LLC will be required. This includes your Articles of Organization and Operating Agreement. The managers and members of the domestic LLC will have the same roles in the North Carolina Foreign LLC.
If you're unsure as to whether you're doing business in a foreign state, take a look at the state laws to determine if you're required to pay state sales tax. If you are, then most likely you are required to register as a Foreign LLC. To elaborate, if your business has a physical presence or networks within the state, then it will be required to collect sales tax on all sales to residents of North Carolina.
A physical presence or network are interchangeable terms, and describe maintaining any of the activities below:
- A warehouse
- A store
- An office
- Sales staff
If your organization interacts with the residents of North Carolina on a substantial or continuous basis or consists of one of the items below (in North Carolina), then qualification or registration is most likely is required:
- Have employees
- Own real estate or lease an office
- Have a bank account
- Have a vehicle registered
- Bid on government contracts
- Are an absentee landlord
- Filing a lawsuit against a resident or business of North Carolina
- Engaging in construction contracts
North Carolina Foreign LLC Registration Exemption
Below are actions that are not considered business transactions in North Carolina:
- Settling or defending a lawsuit
- Holding a manager or member meeting
- Investing or making loans with or without security
- Collecting or securing debts
- Collecting royalties and any other non-operating interests
- Having an isolated transaction that concludes within 30 days and isn't regularly repeated
A full legal description of each item can be found in Section 57D-7-01 of the North Carolina General Statutes.
North Carolina Foreign LLC Registration Process
A lawyer is not required by the state in order to form a North Carolina Foreign LLC. However, it can be a complicated process. A competent North Carolina accountant or lawyer, or both, may be able to assist you in the process.
You're not required to reserve the name of your business before submitting an application to form a foreign LLC in North Carolina, but it is recommended so that someone else doesn't take it. The name of your LLC in your home state may not always be available. If the name is taken, then you'll need to register a Doing Business As (DBA) name with the North Carolina SOS.
The North Carolina SOS will require the following:
- Name of the business
- Home state and date of formation
- Certificate of Authority
- Name of the registered agent and their address
- Principal address of the business
- Names, titles, and business addresses of managers
The North Carolina SOS charges a filing fee of $250 and requires all LLCs to have a registered agent.
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