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I don’t know if you’re thinking about this because you’ve heard so-and-so state is a good tax shelter state. You may just want to register in another state, because it looks good on paper.
It’s really none of my business. However, starting a business in another state or multiple states can get a little tricky (depending on the type of business). For example, registering an online store may be less work than opening a brick-and-mortar store.
So, before you swipe your card or fill out any paperwork, figure out the costs of registering your business in another state.
Have you ever heard of the saying it’s cheaper to keep her? Well, it may be better for you financially if you registered your business in your home state.
Okay, now that I got that off my chest, let’s get started.
There’s no law or rule that says you can’t live in one state and open a business in another state.
You’ll still have to get all of your paperwork in order, e.g., business license, seller’s permit, articles of incorporation, etc.
If you live in the same state as your home business, you’ll have to follow the rules of your home state. For example, if your business is based in California and you decide to start a new business in Texas, then your California company can continue operating.
There are benefits to living and doing business somewhere else though. For example, if you want to be closer to customers or market your company’s products more effectively.
So, moving out of your home state could be beneficial for your company’s growth.
Yes, it’s possible to have a business in 2 different states.
If you want to start a business in another state, you must have the proper paperwork to do so, e.g., business licenses, business permits, articles of incorporation (or certificate of formation), etc.
This means that if you want to run a legit business in more than one state you may need to register (or incorporate) in more than one state. This doesn’t mean you have to register in every state where you sell products or where your customers are located, e.g., online store.
This really applies to businesses that are trying to expand their business to other states. For example, a restaurant opening up another franchise location in a different state.
Before starting a new business in another state, you need to make sure that the corporation is following all of the requirements for operating in multiple states.
You can get an opinion from a tax and/or business lawyer about whether or not your business benefits from being incorporated (or registered) in multiple states.
If you want to business to operate in multiple states, then you’ll need to register it as a foreign corporation (in those other states).
You also have to determine if your business opportunities are limited in a certain state or if you’re able to service both states at the same time.
If your business is only limited to one specific state, then you will need to change the articles of incorporation (or certificate of formation) so that they apply only to that state.
If your business operates in multiple states, then your articles of incorporation should be changed to describe those additional states. The next step is hiring an outside legal counsel who can help clear up any additional questions or concerns you may have about operating in multiple states.
A foreign corporation is a business operating in a state other than its state of formation (or the state it was registered in). So, a business may have to register as a foreign corporation in those other states.
For example, a Delaware corporation incorporated (or registered) in a state other than Delaware is a foreign corporation.
So, a corporation registered in Delaware doesn’t automatically give it the right to operate in California. Businesses also have to think about the potential legal, tax, and registration requirements for foreign corporations.
This can include the costs of making sales, establishing an office, or conducting any other type of business out of its home state.
Wrapping It Up
I don’t know if you’re considering registering your business in another state, because it’s a good vacation spot or a better market for your industry.
Again, it’s really none of my business. But there are no rules against starting a business in another state. Of course, you’ll have to complete all the important paperwork to make sure your business is legit.
Regardless of whether you’re starting a business from scratch or adding a new location, you’re not breaking any laws.
So, would you move to another state to start or expand your business?