Do you want to expand an existing LLC into Ohio with a foreign qualification, but you’re not familiar with the process?
This guide will outline important details when expanding your business and explain how to foreign qualify an LLC in Ohio.
Your business is growing, and you’re planning an expansion to other states. It’s a good problem to have!
But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state where you plan to do business.
It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the LLC was originally formed.
For example, if your LLC is registered in Michigan and you are looking to open a second location in Ohio, you may need to complete a foreign qualification in Ohio before you can expand there.
Important Note: If you’d like to save time and have the foreign qualification paperwork taken care of for you, many of the best LLC services can handle this task for you.
Foreign qualifying is essentially asking permission to do business in the state of Ohio. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in Ohio yields consequences that are far costlier than registering in the first place.
If you fail to foreign qualify, your business will no longer be allowed to maintain a lawsuit in Ohio courts, and you will have the Secretary of State appointed as your statutory agent.
However, transacting business without registering will not cancel or invalidate your existing contracts, nor will it prevent your LLC from defending a lawsuit in the state. Still, given the potential penalties, it’s best to foreign qualify as soon as you begin doing business in Ohio.
We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Ohio? The state’s Revised Code is fairly vague on the topic, which can lead to some confusion. Fortunately, we know from other state and tax laws that you are considered to be “doing business” in most states and required to foreign qualify if:
And you can’t forget about LLC taxes. Most businesses operating in Ohio, including LLCs, are subject to a Commercial Activity Tax. Foreign qualification informs the state that your company will be paying taxes like this. If you aren’t registered, they can’t tax you. While this sounds tempting at first, it will likely lead to more severe penalties down the road. It’s important to always stay on top of your LLC’s taxation requirements to avoid any unwelcome surprises.
If you’re unsure whether or not you need to file for a foreign qualification in Ohio, we suggest seeking legal counsel.
The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Ohio. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:
See your only Ohio business activities listed here? If so, you’re likely exempt from foreign qualifying. Even so, it’s a good idea to scan the more detailed list found in the Ohio Revised Code Section 1776.88 and talk to an attorney if you have any questions.
Foreign qualification in Ohio is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in Ohio, your ticket to doing business in the state is Form 533b: Registration of a Foreign LLC Company. There are two ways to submit this form: online and by mail.
You may be itching to start doing business in Ohio (or maybe you already have). If expediency is your goal, filing online is the fastest route. Just follow these steps:
But sometimes you can’t beat the feeling of a nice paper form. To submit via postal mail, click the link to download a PDF version of Form 533b on the Filing Forms & Fee Schedule page. This form must be typed and printed single-sided; the Secretary of State’s office won’t accept handwritten or double-sided forms. When you’ve finished the form, you can mail it off to:
Office of Ohio Secretary of State
P.O. Box 670
Columbus, OH 43216
There are three expedited service options: 2-Day for $100, 1-Day for $200, and 4-Hour for $300. Expedited forms are mailed to a different address: P.O. Box 1390 Columbus, OH 43216. Otherwise, normal processing for mailed documents is 4-5 business days.
A foreign qualification will cost you $99, and you can pay via check or card. When filing online, you’ll be prompted to enter your credit or debit card information. For mailed forms, include a check made out to the “Ohio Secretary of State” or a “Credit Card Authorization Form.”
After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on its way to foreign qualification, and you’re embarking on another chapter in the life of your business.
Like other states, Ohio has a set of rules for your business name. In all the excitement of extending your LLC to a new state, check to confirm that your name is compliant. Your LLC name must:
You can also reserve your Ohio business name if you’re not quite ready to foreign qualify your LLC. See here for additional information on name distinguishability and requirements.
We think you should foreign qualify your LLC before you begin conducting business in a new state. If you don’t, your business could be subject to a broad range of fines and penalties for operating an LLC in a jurisdiction where you don’t have permission to do so.
You’ll typically need to wait roughly 4-5 business days after the date of receipt for Ohio to process your application. Online filings are typically much quicker — just a day or two at most.
Chances are, you’ll require at least one license or permit to operate your LLC in compliance with Ohio state law. For more information about business licenses and more in this state, check out Ohio’s convenient Licenses and Permits webpage.
No. Whether you operate a domestic or foreign LLC in this state, you are not required to file an Ohio LLC Annual Report.
The overall costs of operating an Ohio LLC can vary considerably based on the specifics of your business. However, we created a helpful guide to help you identify and plan for every expense your LLC will face in this state.
The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.
Using an LLC service means your business will be foreign qualified by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.
Using an online LLC service removes much of the hassle from the foreign qualification process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your Ohio statutory agent.
The service then files your Registration of a Foreign LLC with the state to qualify your LLC to do business in Ohio.
Disclaimer: The content on this page is for informational purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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