Do you own a limited liability company (LLC) created in a state other than Nevada, but you want to expand your business to the Silver State? If so, you’ll need to qualify your foreign LLC in order to transact business in Nevada.
What is a foreign qualification and how do foreign LLCs function within the state of Nevada? In this guide, we’ll answer these questions and more.
Guru Tip: If you’d rather hire an online service to handle this process for you, many of the best LLC services can handle it for you.
What Is a Foreign Qualification?
A foreign qualification enables your limited liability company to do business in the state of Nevada. It doesn’t matter which state you originally formed your business in ― or in other words, the state your domestic LLC is located in ― as the qualification process to register a foreign LLC in Nevada is the same regardless of where your domestic LLC is based.
The confusion surrounding foreign qualification usually centers on what it means to “do business” in a state outside of your primary state. This gets especially problematic considering some states don’t strictly define what it means to transact business in that state. However, Nevada state law does provide a definition of “doing business” in the state.
What Qualifies as ‘Doing Business’ in Nevada
According to the Nevada Secretary of State, the term “business” refers to “any natural person who performs a service or engages in a trade for profit.” Naturally, this is a broad definition, but it can be inferred that if your business “performs a service or engages in a trade for profit,” then the state would consider you to be “doing business.” However, there actually a number of exceptions to this rule outlined in Nevada state law.
What Does NOT Qualify as ‘Doing Business’ in Nevada
The state of Nevada has adopted the provisions of the Revised Model Act, which outlines certain activities that do not qualify as “doing business” in the state, and has also added a few additional provisions. You do not need to obtain foreign qualification to pursue the following activities in Nevada:
How to Get Foreign Qualification in Nevada
If you want to foreign qualify your LLC in Nevada, you’ll need to file an Application for Registration of Foreign Limited-Liability Company with the Nevada Secretary of State. This form requires the following information:
Filing Fee: $75, with the check made payable to the “Secretary of State.”
What Is the Penalty for Not Getting Foreign Qualification in Nevada?
There are two major penalties for failing to qualify a foreign LLC in Nevada. First, your business will not be able to file a lawsuit against a third party in a Nevada court. And second, your business will be given a fine between $1,000 and $10,000.
Should I Hire a Business Service Provider to File My Nevada Foreign Qualification?
If you don’t want to handle your foreign qualification on your own, you have options. Some entrepreneurs choose to hire a lawyer to prepare and file their Certificate of Authority, which can be a good option if you’re concerned about getting the job done right. However, attorney’s fees can be quite expensive.
The other option is to hire a business service provider like Incfile or ZenBusiness to register your foreign LLC with the state of Nevada.
These companies can typically get your foreign qualification done for a fraction of the price of an attorney. This is our preferred route if you don’t want to go with the DIY option.
The process for getting a foreign qualification in the state of Nevada is pretty simple. The paperwork generally takes 2-3 weeks to process, but you can pay additional fees for expedited service. Additionally, Nevada does not require a Certificate of Existence like some other states. Still, this isn’t a process that you can afford to take lightly, because the penalties for not qualifying a foreign LLC in Nevada can be severe ― especially if your company is fined for $10,000, or is unable to sue a third party for breach of contract.
We hope this article managed to answer your questions about obtaining a Nevada foreign qualification, and we wish you a prosperous business future!