If you’re planning to operate your Delaware LLC in New York, you may wonder about the necessary steps. Is your Delaware LLC allowed to do business in New York? The answer is yes, but first, you need to complete a foreign qualification.
While it might sound complicated, we’re going to break down how to qualify a Delaware LLC in New York in this easy-to-understand guide.
Does a Delaware LLC Need to Register in New York?
First, let’s discuss when a Delaware LLC needs to register as a foreign entity in New York. To put it simply, if your Delaware LLC is going to do business or have a physical presence in New York, you will need to complete a foreign qualification.
Here are some situations where you will need to qualify a Delaware LLC in New York:
- Opening an Office in New York: If your Delaware LLC is planning to open an office or storefront in New York, you will need to complete a foreign qualification.
- Serving New York Customers: Maybe you’re planning to deliver products or provide services to customers living in New York. In this case, you’re doing business in New York and need to register your Delaware LLC with the New York Secretary of State’s office.
- Hiring Employees in New York: If you plan to hire New York residents to work for your company, then authorities consider your business as operating in New York.
- Buying Property in New York: Owning real estate or other significant assets in New York also means your Delaware LLC is doing business in the state.
In simpler terms, if your Delaware LLC or Corporation is already doing, or is planning to do business in New York, you need to complete a foreign qualification in New York.
What Is a Foreign Qualification?
Let’s get more familiar with the term “foreign qualification.” It might sound like something related to international businesses, but it’s actually simpler than that. In the business world, foreign qualification is a process where a company, formed in one state (like your Delaware LLC), must register to conduct business in another state (such as New York).
Steps to Register Your Delaware LLC in New York
Here is a step-by-step guide of how to register a Delaware LLC to do business in New York:
Step 1.) File an Application:
The first step is to fill out and submit an “Application for Authority” to the New York Secretary of State’s office. This is New York’s name for the foreign qualification form.
Completing the New York State Application for Authority requires filling out some basic information about the company, including:
- The company’s corporate name;
- The state where the company was formed;
- The date the company was formed in its home state; and,
- The company’s registered agent address in its home state.
Note that you will also need to include a Delaware Certificate of Good Standing when you file a New York Application for Authority for your Delaware LLC. A Delaware registered agent, like IncNow, can help you get a Certificate of Good Standing from the Delaware Secretary of State’s office.
Step 2.) Get a Registered Agent in New York:
Most states, including New York, require foreign companies to appoint a registered agent in the state if they are going to be conducting business. A New York registered agent needs to have a physical address in New York so they can receive official mail and legal papers on behalf of your Delaware LLC.
If your company does not have a physical address in New York, you will need to hire a New York registered agent service to be your agent.
Why Does a Delaware LLC Need to Register in New York?
Every U.S. state has its own laws and regulations about how business entities, like LLCs, should operate. So, even if your business is set up and registered in Delaware, if you want to do business in New York, you need to comply with New York’s rules too. This is why foreign qualification is so important. It ensures that your business entity is legally allowed to operate in a different state.
How Much Does a Foreign Qualification in New York Cost?
Registering a Delaware LLC in New York isn’t free. There are several costs involved, which include:
- New York State Filing Fee: This is the fee that you have to pay to the state of New York to process your Application for Authority.
- Registered Agent Fee: If you hire a professional registered agent service in New York, you’ll need to pay them a fee for their services.
- Delaware Certificate of Good Standing: IncNow can help you get a Delaware Certificate of Good Standing for $99.
Some states require foreign companies to provide a Certificate of Good Standing from their home state. This document shows that your Delaware LLC is in compliance with all Delaware laws and has paid its franchise tax balance.
What If I Don’t Qualify My Delaware LLC in New York?
If your Delaware LLC conducts business in New York without first completing a foreign qualification, it may face serious fines and penalties..
Foreign qualification is a crucial step for Delaware businesses that want to expand their operations to New York or any other state. While it involves some paperwork and fees, completing the legal requirements is essential for your business to operate smoothly and avoid penalties.
Always remember, if you’re unsure about anything related to foreign qualification or your business’s legal requirements, it’s a good idea to get advice from professionals.
Hopefully, this guide has helped simplify the foreign qualification process for your Delaware LLC in New York. Keep in mind that every step you take towards complying with laws and regulations is a step towards the long-term success of your business.