How to Become a Foreign Business in Kentucky

Find out how to qualify your LLC to conduct business in Kentucky.

If you own a company that was founded in a state other than Kentucky, you must qualify or register it in Kentucky in order to conduct business there. The requirements for qualifying your international (non-Kentucky) limited liability corporation (LLC) to conduct business in Kentucky are summarized here.

Nota bene: Part of Kentucky’s procedures for establishing international LLCs are included in a relatively recent set of laws—the Kentucky Company Entity Filing Act—that governs foreign business registration in general. These companies are referred to as “foreign entities” under the Act.

What exactly is a Foreign LLC?

If your LLC was founded in another state, it is referred to as a foreign LLC in Kentucky. 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. In Massachusetts, for example, an LLC incorporated in Rhode Island is a foreign LLC.

Doing Business in Kentucky

If you are “transacting business” in Kentucky, you must register your foreign company with the state, according to Kentucky’s LLC Act. What exactly does this mean? In fact, Kentucky’s business entity rules, like those of the majority of states, do not define the word “transacting business” in regard 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

Kentucky’s business entity rules, like those in other jurisdictions, stipulate certain acts do not constitute doing business in the state. Among the objects mentioned are:

defending or settling a lawsuit dealing with internal LLC 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 that require acceptance outside the state before they become contracts

The latter list is not inclusive, and additional activities may also be excluded, according to the corporate entity legislation. Check Section 14A.9-010 of the Kentucky Revised Statutes for a complete legal explanation of each of the listed things.

If your LLC’s only operation in Kentucky is one or more of the activities mentioned above, you should not be required to register with the state.

Authority Certificate

You must submit a Certificate of Authority (Foreign Firm Entity) (Form FBE) with the Kentucky Secretary of State to register your business in Kentucky. The application form may be downloaded on the SOS website. In contrast to other states, Kentucky employs a single form for all sorts of registered businesses.

To complete the form, you must supply the same information that you would need to incorporate an LLC in your home state. More precisely, for a Kentucky registration application, you must provide:

your company’s legal structure
If applicable, the name of your LLC as it appears on record in the state where it was formed, as well as the different name your LLC will use in Kentucky (required only if your LLC’s real name or something very similar is already being used by a Kentucky registered business, or if the real name does not comply with Kentucky’s LLC naming rules).
the state in which your LLC was formed the date your LLC was formed the length of your LLC, which may be permanent the street address of your LLC’s major office the street address of your LLC’s registered office in Kentucky
the name of your Kentucky LLC’s registered agent
a declaration indicating if your LLC is managed by a manager
If your LLC is controlled by managers, include the names and business addresses of the management.
an effective date for the application, which might be the filing date
a signed permission statement from your Kentucky registered agent (included on Form FBE), and an approved signature of an LLC member or management.

The price for filing is $90.

What Happens If You Do Not Sign Up?

If your LLC does business in Kentucky without permission, it cannot sue in any of the state’s courts. Furthermore, the LLC is subject to a $2 fine for each day it does business in Kentucky without a certificate of authorization. However, not being registered does not render your LLC’s obligations null and void or bar it from defending a lawsuit in Kentucky.

Foreign Corporation Registration in Kentucky

The regulations and standards for international qualifying in Kentucky are fairly similar whether your company is structured as a corporation rather than an LLC. The identical Form FBE will be used. For information and filing methods for registering a foreign company in Kentucky, see the Kentucky Secretary of State’s website.