As a small business owner, there are various legal and tax aspects that need to be personally managed. While expanding your business to another state can be lucrative, there are considerations to be made to ensure proper legal compliance. In addition to incorporating Orlando General Liability Insurance in your new business plan, the following attentions can help to reduce loss and financial liability for your business.
In order to conduct business in another state, you must register with a foreign qualification, which is defined by Biz Filings as the process of filing the appropriate paperwork to register a foreign LLC or corporation to conduct business in another state.
Since the popularization of mobile and virtual business ventures, it can be difficult to decipher what’s considered doing business in another state. Small Business Trends recommends consulting with an attorney or accountant to determine the following: Does your LLC have a physical presence in another state? Are you conducting meetings with clients in that state? Does significant revenue come from another state? Do you pay state payroll taxes for out of state employees? And finally, Did you apply for a business license in the state?
If so, a foreign qualification registration is required in order to ensure compliance with the law. Proper registration is critical as it is a legal obligation for you as the business owner. If one is not filed, penalties and legal action could ensue including fines and interest accrual, back tax liability for the length of time your business earned income with being foreign qualified, and the inability to sue in the nonregistered state.
Although business expansion is ideal for any owner, bear in mind the consequences of foreign qualification. Annual fees, knowledge of state laws, and additional paperwork are a few extra responsibilities of registering your business in another state. Consider the profit margins compared to the costs of operating in other states prior to expanding your business.
At Newman Crane, we specialize in customizing solutions to protect small businesses like yours. We offer a variety of commercial insurance packages to safeguard your business against the scope of risks it might endure. To learn more about which coverages are best suited for you, contact our specialists today at (407) 859-3691.