Because the LLC filing fees on one state may be significantly higher than a neighboring state, some people consider filing for LLC status in one state while running the business from another.
As an example, an Indiana Limited Liability Company can be created and filed for an Illinois-base business, and doing so will offer the liability protection that any LLC would. Plus an Indiana filing is significantly less expensive to make than an Illinois filing.
But there is more to consider.
If the business is located in Illinois, the Indiana LLC would then likely need to register with the Illinois Secretary of State as a Foreign LLC, and the filing fee for that step often makes the cost of registering within the state of operation an equal or better choice.
Without this Foreign LLC registration, the LLC could not sue in Illinois courts, and it may be unable to secure some of the local- and state-required permits or licenses for the business.
Certain Illinois tax laws and regulations may also require that the Indiana LLC register in Illinois regardless. And other issues regarding the ability of the Indiana LLC to transact business in the state of Illinois may also arise.
So while a Foreign LLC filing may be made, it is up to the business owner to determine the actual benefit of such a step. Saving money on the filing fees may not end up being a benefit…
For the legal forms required to create an LLC filing in any USA State, see Standard Legal’s LLC page.