Starting a business can be an exciting endeavor, especially if you contribute to your local community. But things change, and you might want to relocate or expand to a different state. Or things aren’t great in your area, so you’d prefer to get a start in entrepreneurship elsewhere.
In any case, you’re thinking big, and you’ve got your sights on another state. There are better opportunities there, and you just know your company will thrive there.
There might be something weighing on your mind though: Can I start a business in another state?
This post will answer this question and any other related concerns so you’re well-informed.
Can I Start a Business in Another State?
Yes, you can start a business in another state. This means that you can say “I live in a different state than my business” and it’s perfectly fine!
Typically, you’d follow the same steps as you would when starting a business in your home state. This means choosing a business structure that’s best for your situation (usually, entrepreneurs choose limited liability companies, or LLCs). The type you pick will affect your registration process and tax obligations, so choose carefully.
Registering and Starting Your Business
You’d then register your business in the state where you intend to operate. This involves filing the necessary formation documents with the state’s Secretary of State or the equivalent of it.
To make things easier, you can use our free business registration service. We serve all 50 states and all you’ll have to pay is the state fees.
Afterward, obtain an employer identification number (EIN) from the IRS, which is used for tax purposes. This allows you to hire employees and open a business bank account. For the latter, consider setting one up in the state where your company operates to make tax filing easier.
Next, ensure that you’re complying with state-specific requirements regarding specific licenses, permits, and zoning approvals. Do your due diligence to research and comply so you’re operating legally.
On that note, research and understand the state’s tax obligations too, including sales tax collection and income tax filing requirements.
In addition, you’ll have to choose a registered agent, which is a service we provide. This is an individual or entity that receives official documents on behalf of your company, and they must have a physical address in the state your business is in.
Maintain Compliance
After registration, stay compliant with state laws. This includes filing annual reports, paying state taxes, and renewing licenses and/or permits as required.
Are you hiring employees in the new state? Then familiarize yourself with the local employment laws, including workers’ compensation, unemployment insurance, and wage laws.
We highly recommend consulting with legal and financial experts, given the complexities of starting a business in another state. Work with professionals who specialize in multi-state operations for peace of mind.
Can My LLC Operate in Another State?
Let’s say that you already have an LLC and want to turn it into a multi-state LLC. If you’re wondering whether that’s possible, then the answer is yes.
Your next thought would probably be on how to register an existing business in another state. The term for this is foreign qualification; it refers to “foreign” in the sense that your company is operating in a different state rather than a different country. Essentially, you’re doing business outside of the state it’s incorporated.
To foreign qualify, you have to register your business in the state of your choosing. Choose a registered agent too.
After gathering your formation documents and obtaining a certificate of good standing, you’ll apply for your certificate of authority. Pay the fee, and you should receive approval shortly. If you’re interested in hearing more about the process, check out this more detailed guide that we have on foreign qualification.
Expand Your Business Opportunities
Those asking, “Can I start a business in another state?” should now be relieved that the answer is yes. What’s great is that you can either start a completely new company or foreign qualify in the state of your choosing, so there are several options available.
No matter which route you take, always ensure that you’re compliant with state laws. That way, you can carry on with operations without worry.
Sign up with Business Anywhere if you’d like to form an LLC, whether it’s your first or one of many. We can get you set up in all 50 states for free!
