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Can I Register a Business in a Different State?

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Many people ask this question, “Can I register a business in a different state than my residence?”

You most certainly can register a business that way. There are no restrictions, but it is recommended that you register your business in the state where you intend to conduct business. Many businesses register in a different state because of the benefits for their business entity type in that state.

If you intend to form an LLC in any state we suggest Northwest registered agent.  Northwest Registered Agent offers businesses two free options for LLC formation and one package of services that is complemented by many separately-priced standalone business-management options. These include registered agent service, annual reports, phone service, virtual office, and payment processing.

In some states, such as California, you cannot avoid paying taxes if you operate your business there.

California imposes a minimum franchise tax on all business entities in the state. If you are starting a business in California you may be surprised to learn that California business entities must pay a minimum franchise tax to the state each year.

For a startup and business operation in California, one needs to pay a minimum annual tax fee of $800. That sounds a lot, isn’t it? Now consider when you’re an online-based business with no office, store, or warehouse in your home state or anything that would otherwise require you to file a foreign entity – then it probably makes sense to register a business in any state of your choice.  A foreign entity is an entity that is initially formed in another state.

Qualifying as a Foreign Entity

You qualify for a foreign entity, meaning register a business in another state if your answer is YES to the following questions:

  • Do you have one or more employees in that state?

  • Does your business have a physical presence in that state? This can include a warehouse, distribution center, office, or storefront.

  • Do you take orders in that state?

  • Does your business have or plan to open a bank account in that state?

  • Does your business own or intend to purchase any property or real estate in that state?

  • Does your business earn revenue in that state?

  • Does your business pay any taxes in that state?

If any of the above applies to your business, or will in the near future, then you are likely considered to be a foreign business operating in that state.

register a business in a different state explained

Some states stand out, particularly for small businesses, due to their low tax requirements, business-friendly laws, and astute court systems.

Delaware, Wyoming, and Nevada are the best states in which you can apply for a foreign entity.

These states stand out, particularly for small businesses, due to their low tax requirements, business-friendly laws, and astute court systems. Furthermore, Delaware benefits from having a Chancery Court. The Delaware Court of Chancery is widely recognized as the nation’s preeminent forum for the determination of disputes involving the internal affairs of the thousands upon thousands of Delaware corporations and other business entities through which a vast amount of the world’s commercial affairs are conducted. Its unique competence and exposure to issues of business law are unmatched.

Also, are you considering small business loans for additional funds to help your small business grow rapidly?  NAV is a great place to start building your business credit for loans, improve the metrics that matter, and access the best financing options.

We have so much in store for you, simply sign up for an Addy & Mark SBO membership and gain access to all resources we have for your business operations. These include; coaches, rewards, new business owner resources, exclusive info sessions, webinars and more. 🏆

You can also schedule a 15-minute consultation to learn more about our services for your specific needs.🚀

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Disclaimer: This article is for information purposes only hence not directly related to Addy and Mark in any way. Always check the official website for updated information.

 

Last Update: October 24th, 2023

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