Expanding or Relocating Your LLC

As your business grows, changes in your operations are bound to follow. Whether you're looking to pick up and move your business’s home base to another state or expand its reach into new territory, each state’s guidelines differ. This blog covers some of the legal concepts around these types of expansions, moves, and changes.

The state in which your business has its “home” is most often where it was formed and/or founded. Every entity has what’s legally referred to as a domicile (its state of incorporation or registration), even if its main office or primary place of operations is elsewhere. Foreign registration and domestication are two different types of entity changes or filings related to bringing a new state into your business practice, whether it’s changing that domicile (the state of incorporation) or adding a location to do business. 

Domestication

The process of domesticating a business means moving its domicile from one state to another. For example, let’s say you formed your business in Ohio, where you currently reside, but recently purchased a home in Pennsylvania. If you no longer intend to do business in Ohio and want to bring your business along in your move, domesticating your business in Pennsylvania may be an appropriate consideration. Your business would then only be domesticated in Pennsylvania, and not in Ohio. 

If you determine that domesticating your business in a new state is the appropriate course of action, you must follow the guidelines of both the current state of domicile as well as the new state of domicile: 

1. Determine if out-of-state domestication is allowed in both states. A handful of states have specific procedures in effect, and some do not allow the business to be domesticated elsewhere. 

2. If both states’ domestication procedures allow you to proceed, ensure the name of your business is available to be used in PA. 

3. It’s important to work with an attorney to understand the appropriate course of action and the applicable forms necessary for your specific scenario.

Foreign Registration

Businesses can only have one domicile, however, they can of course do business all over the US. Under foreign registration, your company will be legally authorized and registered to do business in another state (called a foreign state, even though it’s still within the US), but its domicile will remain the same. For example, let’s say your business is domiciled in Ohio, but you live very close to the Pennsylvania border, and you seek to open another office in Pennsylvania. If you wish to expand your business operations into Pennsylvania, you will need to register as a foreign entity with the Secretary of State’s office in Pennsylvania. Not all companies even have their corporate headquarters in the same state as their state of incorporation/organization.

Generally, if you are going to do business, including hiring employees who live in other states or opening offices, outside the borders of your business’ domicile, you may need to register your business as a foreign entity. This registration depends on the type of business you’ll be conducting and the state where it will take place. Each state has its own laws that define what “doing business” is and is not, and whether such scenarios would warrant foreign registration. Pennsylvania law mandates foreign registration for doing business, and defines specific scenarios that do not constitute doing business. For example, holding an internal meeting, maintaining a bank account, or ownership of real estate for investment purposes. 

What is the procedure for registering my business as a foreign entity?

1. Ensure the name of your business is distinguishable from other entity names in the foreign state.  If it is not available, the state will likely have guidelines for what to do and what to call the business there. 

2. File a foreign registration statement with the help of an attorney. 

3. In Pennsylvania, a foreign entity must continuously maintain a registered office within the state. If you don’t plan to have an office, you can utilize a commercial registered office provider (CROP).

Whether you are looking to relocate or expand your business, our attorneys can help ensure the process is smooth. If you are ready to get the process started, reach out to us to discuss. If you’re interested in Trellis as a CROP provider for your foreign entity registration, we’re happy to help. Fill out our contact form, and someone will be in touch with next steps.

DISCLAIMER: This blog post is meant for informational purposes only and does not constitute specific legal advice or create an attorney-client relationship. Readers should discuss their specific situation and considerations with an attorney.