If you own a business that was created in a state other than Florida, you will need to qualify or register that business in Florida if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Florida) limited liability company (LLC) to do business in Florida.
What is a Foreign LLC?
For Florida purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Florida. In other words, foreign doesn’t mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in Arizona is a foreign LLC in Colorado.
Transacting Business in Florida
According to Florida’s LLC Act, you are required to register your foreign company with the state of Florida if you are “transacting business” in Florida. What does this mean? Well, like most states, Florida’s LLC Act does not specifically define the phrase “transacting business” in relation to foreign registrations.
However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state’s residents. Generally speaking, physical presence and nexus are synonymous, and mean having:
- a warehouse in the state
- a store in the state
- an office in the state, or
- a sales representative in the state.
Certain exceptions may apply and the rules can get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check ThelawQ.com’s articles on Internet Sales Tax: A 50-State Guide to State Laws. In addition, the Florida Department of Revenue has a webpage for out-of-state businesses that may provide additional guidance.
Certain Activities Are Exempt
Like most states, Florida’s LLC Act specifies certain activities that do not constitute transacting business in the state. The items listed include:
- defending or settling a lawsuit
- dealing with internal LLC affairs such as holding member or manager meetings
- having a bank account in the state
- having an office, agency, or persons in the state for handling your company’s own securities
- selling through independent contractors
- soliciting or obtaining orders where the orders require acceptance outside the state before they become contracts
- creating or acquiring indebtedness, mortgages, or security interests in real or personal property
- securing or collecting debts
- transacting business in interstate commerce
- conducting an isolated transaction that is completed within thirty days and is not one in the course of similar, repeated transactions
- in certain circumstances, owning and controlling other corporations, LLCs, or partnerships; and
- owning, without more, real or personal property.
The LLC Act specifically states that the latter list is not exhaustive; other activities also may be exempt. The listed exemption regarding ownership or control of another business is complicated; if your LLC owns or controls a Florida business, you should consult with a lawyer for further guidance. For the full, legal description of each of the listed items, check Section 605.0905 of the Florida LLC Act.
If your LLC’s only activity in Florida is one or more of the listed items, you should not need to register with the state.
Certificate of Authority
To register your business in Florida, you must file an application to transact business with the Florida Department of State (DOS). You can download a copy of the application form from the DOS website. (The full name printed on the form is Application by a Foreign Limited Liability Company for Authorization to Transact Business in Florida, which is a mouthful.)
To complete the application, you must provide more or less the same information that you need to create an LLC in your home state. More specifically, for a Florida application, you need to provide:
- the name of your LLC as registered in the state where it was organized
- if necessary, an alternate name your LLC will use when transacting business in Florida (you must have an alternate name if your LLC’s original name or something very similar is already being used by a Florida registered business, or if the name does not contain the words “Limited Liability Company,” the abbreviation “L.L.C.,” or the designation “LLC”)
- the state where your LLC was organized
- your federal employer identification number (EIN), if applicable
- the date your LLC first transacted business in Florida if prior to registration
- the street address of your LLC’s principal office
- the street address of your LLC’s current designated office in Florida
- if different, your LLC’s mailing address
- the name and street address of your LLC’s registered agent in Florida
- a statement of acceptance by your registered agent including the agent’s signature
- the name, title, and address of each person who has the authority to manage your LLC
- a certificate of existence, and
- an authorized signature including the signer’s printed name and a statement that the signer understands that providing false information is a felony under Florida law.
The certificate of existence you include should be no more than 90 days old. The downloadable application form includes a required cover letter. Fill it in with the name of your LLC and the contact information of the person filing. Be aware that if you transacted business in Florida before registration, the DOS may charge you a penalty.
You must submit two copies of your application with one copy being the original, signed form. The basic filing fee is $125 ($100 for the application and $25 for the designation of a registered agent).
What Happens if You Don’t Register?
If your LLC transacts business in Florida without authority, it cannot bring a lawsuit in the state. In addition, your LLC will be liable for all fees and penalties it should have paid if it had properly registered, plus a civil penalty of between $500 and $1,000 for each year your LLC transacted business without a certificate of authority. However, not being registered does not invalidate your LLC’s contracts or prevent it from defending a lawsuit in Florida. Also, a member or manager of the LLC is not liable for the LLC’s debts, obligations, or other liabilities solely because the company transacted business in Florida without a certificate of authority.
Registering a Foreign Corporation in Florida
If your business is organized as a corporation rather than an LLC, the rules and requirements for a foreign qualification in Florida are similar. You will, however, have to use a different application form. See the Florida Department of State website for forms, information, and filing instructions for registering a foreign corporation in Florida.
We can help you with the legal issue that you’re facing, feel free to email us any legal queries and we will answer it for free. Our email address: firstname.lastname@example.org and website: thelawq.com