‹ FAQ
What Triggers Foreign Qualification?
How to tell if your LLC needs to register in another state.
The short answer
If your LLC has a physical presence or employees in a state other than where it was formed, you almost certainly need to foreign qualify there. The exact definition of "doing business" varies by state, but the triggers below apply in nearly all of them.
Common triggers
- Physical office
- Renting or owning office, retail, or warehouse space
- Employees
- Hiring W-2 employees who work in the state
- Property
- Owning or leasing real property in the state
- Recurring transactions
- Regular, ongoing business activity (not one-off sales)
- Inventory
- Storing goods or inventory in a fulfillment center
What usually does NOT trigger it
- Online sales
- Selling to customers in another state via e-commerce
- Remote work
- Having independent contractors (not W-2) in another state
- Bank accounts
- Maintaining a bank account in another state
- Isolated deals
- A single transaction or short-term project
- Holding meetings
- Occasional board meetings or travel for business
States with stricter rules
Some states interpret "doing business" more broadly than others.
- California
- Recurring revenue from CA customers can trigger it
- New York
- Regular business transactions, even without a physical office
- Texas
- Revenue sourced from Texas can trigger franchise tax obligations
- Washington
- Processing transactions in WA may require registration
Consequences of not registering
States can impose fines, deny you access to their court system, charge back fees and penalties for years of non-compliance, and in some cases hold officers personally liable. The cost of registering upfront is almost always less than the cost of getting caught.
This guide provides general information based on publicly available state requirements. It is not legal advice. Consult an attorney for guidance specific to your situation.