Do you own a limited liability company (LLC) created in a state other than West Virginia, but you want to expand your business to the Mountain State? If so, you’ll need to qualify your foreign LLC in order to transact business in West Virginia.
What is a foreign qualification and how do foreign LLCs function within the state of West Virginia? 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 West Virginia. 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 West Virginia 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, West Virginia state law does define “doing business” in the state.
What Qualifies as ‘Doing Business’ in West Virginia
According to West Virginia State law, “a foreign corporation is deemed to be transacting business in this State if:
What Does NOT Qualify as ‘Doing Business’ in West Virginia
Meanwhile, the following activities are not considered to be “doing business,” and you do not need to qualify a foreign LLC to pursue them:
How to Get Foreign Qualification in West Virginia
If you want to foreign qualify your LLC in West Virginia, you will need to register your business on the One Stop Business Portal. Foreign entity registration ensures that your business has a Certificate of Authority to conduct business in the state. In addition to providing standard information related to your business, you will also need to obtain a Certificate of Good Standing from your business’ state of formation. For more information on this process, consult this link.
Filing Fee: $150.
What Is the Penalty for Not Getting Foreign Qualification in West Virginia?
If your company conducts business in West Virginia before registering as a foreign entity, you will not be able to file a lawsuit against a third party in a state court. This means that individuals and businesses could fail to honor contracts with your business, and you wouldn’t be able to do anything about it legally.
Should I Hire a Business Service Provider to File My West Virginia 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 West Virginia.
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 foreign qualification in the state of West Virginia isn’t particularly complicated compared to some other states. Foreign qualification can be filed online or by mail, and the paperwork does not require a great deal of information. However, you will need to provide a Certificate of Good Standing, which can take extra time to obtain. In addition, West Virginia’s rules and regulations regarding which LLCs need to foreign qualify are considerably looser than many states, with numerous exemptions outlined in the laws of the state. Still, this isn’t a process that should be overlooked, because the penalties for not qualifying a foreign LLC in West Virginia can be severe ― especially if someone you do business with doesn’t live up to their end of a contract and you’re unable to sue them.
We hope this article managed to answer your questions about obtaining a West Virginia foreign qualification, and we wish you a prosperous business future!