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 Washington and you are looking to open a second location in Missouri, you may need to complete a foreign qualification in Missouri before you can expand there.
What happens if I fail to foreign qualify before doing business in Missouri?
Foreign qualifying is essentially asking permission to do business in the state of Missouri. 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 Missouri yields consequences that are far costlier than registering in the first place.
If you fail to foreign qualify, your business will not be allowed to commence or maintain a lawsuit in Missouri courts. In addition, your LLC will be subject to a fine of up to $1,000 and the Attorney General may stop you from doing business in the state.
Even so, transacting business in the state without authorization won’t completely inhibit your activities there. For example, it won’t invalidate your existing contracts or prevent you from defending a lawsuit.
See what the Missouri LLC Act says about it in Section 347.163.
What is considered “doing business” in Missouri?
We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Missouri? The S.O.S. website says “whether an entity is doing business in the state is determined on a case-by-case basis,” and advises LLCs to get legal assistance to determine what is and isn’t “doing business.” In most states, however, you are considered to be “doing business” and required to foreign qualify if:
- Your LLC maintains offices, stores, warehouses, distribution centers, or has some other type of physical presence in the state.
- There are salespeople, agents, or representatives doing business on your behalf in the state
Again, if you’re unsure whether or not you need to file for a foreign qualification in Missouri, it’s best to seek legal counsel.
Could I be exempt from foreign qualifying in Missouri?
The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Missouri. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:
- Maintaining or defending any action or lawsuit in a Missouri court
- Dealing with internal business affairs, like holding meetings for LLC members and/or managers
- Maintaining in-state bank accounts
- Borrowing money or creating evidence of debt
- Securing and collecting debts
- Transacting business in interstate commerce
- A single transaction, not in a series of similar transactions, taking place within a 30-day window
If your only business activities in Missouri consist of items on this list, you’re likely exempt from foreign qualifying. But considering the potential penalties, it might be worth speaking with an attorney anyway to be absolutely sure.
How to Foreign Qualify Your LLC in Missouri
Foreign qualification in Missouri 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 Missouri, the cheapest and quickest method is to file online through the Secretary of State website. Here’s how:
- Go to the Corporations Online Portal.
- Create an account (if you haven’t already)
- Under “LLC Filings,” select “Create LLC”
- From the drop-down boxes, choose “Limited Liability Company” and “Foreign”
- Follow the on-screen instructions to complete the form
- Enter your payment information to pay the $50 fee
Or, if you prefer, you can file via postal mail. Download and complete the “Application for Registration of a Foreign LLC.” Send your finished form and a check (made out to “Secretary of State”) for $105 to:
Secretary of State, Corporations Division
P.O. Box 778
Jefferson City, Missouri 65102
They will also accept hand-delivered forms, so if you’re local to Jefferson City, drop it off at:
600 W. Main St., Rm. 322
Jefferson City, Missouri 65102
Along with your completed form – whether online or on paper – you will need to submit a valid Certificate of Good Standing from the state where your LLC was formed. It must not be more than 60 days old.
Processing times vary depending on how you file. Online forms are processed in 24 hours, mailed ones in 4-7 business days, and in-person submissions while you wait.
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.
Name Requirements to Remember
New state, new business name rules. Be sure to check your name’s compliance with Missouri state law before submitting your application. Your LLC name must:
- Use one of the following – “limited company,” “limited liability company,” “LC,” “LLC,” “L.C.,” or “L.L.C.”
- Not include the words “corporation,” “incorporated,” “limited partnership,” “limited liability partnership,” or any forms/abbreviations of these terms
- Not use any terms that imply affiliation with a governmental agency
- Be distinguishable from every other business entity name on file with the Missouri Secretary of State (perform a Missouri LLC name search to make sure the name you want is available)
You can also reserve your Missouri business name if you’re not quite ready to foreign qualify your LLC.
Should I hire a service to file my Missouri foreign LLC?
Considering all the work that goes into expanding your business to a new state, you’ve likely got a lot on your plate. Rather than trying to juggle everything yourself, you can bring on an individual or company to help you secure your LLC’s Missouri foreign qualification.
For example, business attorneys understand all the legal nuances involved, providing peace of mind that the job will get done correctly. But if you go this route, be sure you have the budget for it. Lawyer fees for Missouri foreign LLC qualifications can be a prohibitively expensive option for businesses operating on tight budgets.
If you’re operating on a limited budget, but still want to have your Missouri foreign LLC professionally registered, go with an online business service provider. There are plenty of reputable companies that can help you out with Missouri foreign qualifications, but here are a couple of our favorites:
- MyCompanyWorks ($99): MyCompanyWorks is one of the only service providers offering foreign qualifications for less than $100. This company receives excellent customer reviews and has a great track record of success, making it a smart choice for a wide range of entrepreneurs.
- IncFile ($149): IncFile offers a free LLC formation service that we have always appreciated, and its pricing for foreign qualifications is a reasonable $149. IncFile has the best customer feedback reputation in the industry, with tens of thousands of positive reviews available online.
- Northwest Registered Agent ($225): Northwest is more of a premium service, with the best customer support in the industry, in our opinion. They also include a year of their namesake registered agent service with every foreign qualification. There’s a reason Northwest is our #1 pick among the best registered agent services!
Frequently Asked Questions
When Is the Best Time to Foreign Qualify an LLC?
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 state where you don’t have permission to do so.
How Long Does It Take Missouri to Process a Foreign Qualification?
You’ll typically need to wait roughly 24 hours for the state to process an online application, compared to 4-7 business days for mailed submissions. If you submit your documents in person, the Missouri Secretary of State’s office will usually process them as you wait.
Where Can I Learn More About the Missouri LLC Licensing and Permitting Requirements?
Chances are, you’ll require at least one license or permit to operate your LLC in compliance with Missouri state law. For more information about business licenses and more in this state, check out the Missouri Division of Professional Registration and the Secretary of State’s Organizations and Agencies list.
Do I Need to File an Annual Report for My Foreign LLC in Missouri?
No. Whether you operate a domestic or foreign LLC in this state, there is no requirement for a Missouri LLC Annual Report.
What Is the Total Expected Cost of Operating an LLC in Missouri?
The overall costs of operating a Missouri 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.
Should I Use an LLC Service, Hire an Attorney, or Foreign Qualify My Own LLC?
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.
How Do Online LLC Services Work?
Using an online Missouri 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 Missouri registered agent.
The service then files your Application for Registration with the state to qualify your LLC to do business in Missouri.
Are LLC Service Websites Legit?
Absolutely. There are quite a few reputable companies offering LLC formation service and foreign qualifications these days, including the two options we discussed earlier: MyCompanyWorks and IncFile.
In fact, while we certainly have our opinions about which ones offer the best pricing and features, every one of the incorporation services we discuss on this website is entirely legitimate and trustworthy.
Need to save time?
Let’s face it, there’s never enough time in the day, especially when you’re running a company. And properly registering your LLC in Missouri involves research and time, time that you could be using to continue growing your business.
If the thought of paperwork, fees and state correspondence makes your head spin, consider using a service like Northwest Registered Agent to foreign qualify your business. Services like Northwest ensure that your forms are filed correctly and on time, potentially saving you thousands of dollars in penalties, not to mention a bunch of time and stress.