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Is my LLC a foreign entity? Texas Wyoming New Jersey

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  • Is my LLC a foreign entity? Texas Wyoming New Jersey

    For tax and business-friendly purposes, I recently registered a company in Wyoming and have listed as the Principal Office the address of my registered agent in Wyoming. No physical items will be sold, but the company intends to make money when customers upload files onto the site. The LLC has three members, and two of these members (neither of which is an employee) live in Texas. Both Texas members will design the website in Texas using a Texas-based web hosting service. I will be manager (living in New Jersey) but my role will only be to consult my Texas co-members via phone, suggest changes to the website to help the business grow, and manage the LLC bank account. Three questions:

    1. Before the website is designed and any customer transactions are executed, do I need to register the LLC as a foreign or out of state entity in Texas or New Jersey? My guess is no on this since no business has been conducted at this point.

    2. Once customers begin to transact business on the site, do I need to register as a foreign entity in Texas and/or New Jersey, especially since the web hosting company my LLC uses is based in Texas and my Texas-dwelling co-members will maintain the site?

    3. If yes to #2, would I be able to avoid registering in Texas if the web hosting company my LLC uses is based in Wyoming?


    My thanks to anyone that can provide some insight!

  • #2
    Originally posted by DVP9999 View Post
    For tax and business-friendly purposes, I recently registered a company in Wyoming and have listed as the Principal Office the address of my registered agent in Wyoming. No physical items will be sold, but the company intends to make money when customers upload files onto the site. The LLC has three members, and two of these members (neither of which is an employee) live in Texas. Both Texas members will design the website in Texas using a Texas-based web hosting service. I will be manager (living in New Jersey) but my role will only be to consult my Texas co-members via phone, suggest changes to the website to help the business grow, and manage the LLC bank account. Three questions:

    1. Before the website is designed and any customer transactions are executed, do I need to register the LLC as a foreign or out of state entity in Texas or New Jersey? My guess is no on this since no business has been conducted at this point.

    2. Once customers begin to transact business on the site, do I need to register as a foreign entity in Texas and/or New Jersey, especially since the web hosting company my LLC uses is based in Texas and my Texas-dwelling co-members will maintain the site?

    3. If yes to #2, would I be able to avoid registering in Texas if the web hosting company my LLC uses is based in Wyoming?


    My thanks to anyone that can provide some insight!
    If You ain't a Texan,
    everything and everybody is considered
    .. a foreign entity....

    .._______________
    ~ Free advice is like your public defender,
    …you get what you pay for. ~ drr
    Last edited by drruthless; 03-16-2012, 01:29 AM.

    Comment


    • #3
      Originally posted by drruthless View Post
      If You ain't a Texan,
      everything and everybody is considered
      .. a foreign entity....

      .._______________
      ~ Free advice is like your public defender,
      …you get what you pay for. ~ drr
      drruthless, I don't see how this answer helps the OP.

      OP; since your thread has been here for some time & you have not received an answer, your best bet is probably to talk to an attorney if you have not already done so. It seems no one who has looked at your question so far has been able to help you.
      Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

      Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

      Comment


      • #4
        Originally posted by Betty3 View Post
        drruthless, I don't see how this answer helps the OP.

        OP; since your thread has been here for some time & you have not received an answer, your best bet is probably to talk to an attorney if you have not already done so. It seems no one who has looked at your question so far has been able to help you.
        I didn't want him to feel forgotten,

        and have you ever lived in Texas??....
        they just think a little differently than the rest of us.....





        ..________________
        ~ I may look old, slow,and stupid,
        but,
        thats part of the plan to lure you in close enough
        for my seeing eye dog to bite you and hit you with my cane

        Comment


        • #5
          I've seen the question and have thought about how, or whether, I can be helpful. Unfortunately, the question of whether a Wyoming LLC needs to register as a foreign entity in any other jurisdiction under the circumstances you describe is simply too tough to answer appropriately in a forum. It is one of those questions I tackle for clients and rarely can give a black and white answer.

          I would say that generally, once you have employees in the state (or owners performing services in the same manner as an employee), you are doing business in the state. From the facts that you gave, that would likely mean that the LLC is doing business in Texas and would need to register as a foreign LLC in Texas.

          Your activities in New Jersey sound more incidental and more like an owner providing broad oversight, so it seems at least more likely that you could take the position that the LLC is not doing business in New Jersey.

          Those are just general thoughts, however. I am not familiar with the details of the laws in New Jersey or Texas with respect to foreign LLCs, nor do I know the consequences in those states of a failure to register if it is in fact required.

          In other words, you should talk to an attorney who is either familiar with the laws or who can spend the time to review the requirements of the two states.
          David K. Staub (www.illinoisbusinessattorney.com)
          Forum posts are not legal advice, are for informational and educational purposes only, and are not a substitute for proper consultation with legal counsel.

          Comment


          • #6
            dkstaub, thank you for the information you were able to furnish the OP even though the OP does need to talk to an attorney.
            Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

            Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

            Comment


            • #7
              Originally posted by dkstaub View Post
              I've seen the question and have thought about how, or whether, I can be helpful. Unfortunately, the question of whether a Wyoming LLC needs to register as a foreign entity in any other jurisdiction under the circumstances you describe is simply too tough to answer appropriately in a forum. It is one of those questions I tackle for clients and rarely can give a black and white answer.

              I would say that generally, once you have employees in the state (or owners performing services in the same manner as an employee), you are doing business in the state. From the facts that you gave, that would likely mean that the LLC is doing business in Texas and would need to register as a foreign LLC in Texas.

              Your activities in New Jersey sound more incidental and more like an owner providing broad oversight, so it seems at least more likely that you could take the position that the LLC is not doing business in New Jersey.

              Those are just general thoughts, however. I am not familiar with the details of the laws in New Jersey or Texas with respect to foreign LLCs, nor do I know the consequences in those states of a failure to register if it is in fact required.

              In other words, you should talk to an attorney who is either familiar with the laws or who can spend the time to review the requirements of the two states.
              Thank you so much for the insight...this truly helped me!!! This is a great site!

              Comment

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