Find out how to qualify your LLC to conduct business in Hawaii.
If you own a company that was founded in a state other than Hawaii, you must qualify or register it in Hawaii in order to conduct business there. The requirements for qualifying your international (non-Hawaii) limited liability corporation (LLC) to conduct business in Hawaii are summarized here.
What exactly is a Foreign LLC?
If your LLC is founded in another state, it is referred to as a foreign LLC in Hawaii. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. An LLC founded in Minnesota, for example, is a foreign LLC in Wisconsin.
Business Transactions in Hawaii
If you are “transacting business” in Hawaii, you must register your foreign company with the state of Hawaii, according to Hawaii’s LLC Act. What exactly does this mean? Well, Hawaii’s LLC Act, like most others, does not define the word “transacting business” in connection to overseas registrations.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
A shop in the state, an office in the state, or a sales representative in the state are all examples of state-based businesses.
Certain exclusions may apply, and the regulations might become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
Hawaii’s LLC Act, like other states’, stipulates specific actions that do not constitute doing business in the state. Among the objects mentioned are:
defending or settling a lawsuit dealing with LLC business affairs such as holding member or manager meetings having a bank account in the state having an office, agency, or persons in the state for handling your company’s own securities selling through independent contractors soliciting or obtaining orders where the orders require acceptance outside the state before they become contracts
Check Section 428-1003 of the Hawaii Revised Statutes for a complete legal definition of each of the listed things. If your LLC’s only operation in Hawaii is one or more of the activities mentioned above, you should not be required to register with the state.
You must submit an Application for Certificate of Authority with the Hawaii Department of Commerce and Consumer Affairs to register your company in Hawaii (DCCA). The application form may be downloaded from the DCCA website. (The form’s full title is Application for Certificate of Authority for Foreign Limited Liability Company.)
To complete the application, you must give the same information that you would provide to register an LLC in your home state. More precisely, for a Hawaii registration application, you must provide:
your LLC’s name precisely as it appears on its certificate of existence (the records of the state where it was formed)
the state in which your LLC was formed
a declaration stating “a record of the names and addresses of all members and their individual capital contributions are maintained and will be preserved at this primary office until this registration is terminated”
the name and street location of your Hawaii LLC’s registered agent the length of your LLC (which may be “at-will”)
an indication of whether your LLC is member-managed or manager-managed, the name and address of each manager if your LLC is manager-managed, the name and address of each member if your LLC is member-managed, the name and address of each member an indication of whether LLC members are liable for all, none, or some of the company’s debts, obligations, and liabilities, An original certificate of existence or comparable document; and an authorized signature.
The secretary of state (or comparable authority) in the state where your LLC is formed will often provide the certificate of existence. The certificate must be no more than sixty days old when you submit your application. You may file on paper or electronically. The base filing price is $50, plus a $1 charge to the state archives.
What Happens If You Do Not Sign Up?
If your LLC does business in Hawaii without authorization, it cannot file a lawsuit there. Furthermore, your LLC will be held accountable for any costs or penalties that it should have paid if it had been legally registered. However, not being registered does not render your LLC’s obligations null and void or bar it from defending a lawsuit in Hawaii. Furthermore, the restrictions on LLC members’ personal responsibility are not eliminated just because the firm conducts business in Hawaii without permission.
Establishing a Foreign Corporation in Hawaii
The regulations and standards for international qualifying in Hawaii are identical whether your company is structured as a corporation rather than an LLC. You must, however, utilize a separate application form (Form DC-1). For paperwork, information, and filing requirements for registering a foreign company in Hawaii, see the Hawaii Secretary of State’s website.