With An Out-Of-State LLC, You’ll Need A Registered Agent
If you live in a state that is a bit unfriendly to small businesses, you might have considered just forming your LLC in a state that isn’t. Investors do this frequently. Here’s the thing though: If you intend to form your LLC in a state that is more friendly to small businesses like small real estate investment companies, you will need a registered agent. That’s your legal obligation.
What does that mean? Well, if your LLC is registered in another state, you have to have someone in that state to handle all of your LLC’s legal and tax documents, and be held accountable in matters of law. You have to have a resident of that state as your registered agent to avoid breaking laws, almost always. Of course, there are a few states where the LLC can serve as its own registered agent. There’s also a way around it if your business has an actual physical address in the state in which you formed your LLC.
So, while you may have heard others registering LLCs in other states that are friendlier to small businesses, it’s not as simple as they may make it seem. Check into the actual laws of the state where you are considering forming an LLC for your real estate investment company and consult with your attorney. Otherwise, you may find that you inadvertently break the law.
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