How to Qualify a Foreign LLC in Connecticut

Your business is growing, and you’re planning an expansion to other states. It’s a good problem to have!

But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state where you plan to do business.

It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the Connecticut LLC was originally formed.

For example, if your LLC is registered in Washington and you are looking to open a second location in Connecticut, you may need to complete a foreign qualification in Connecticut before you can expand there.

Important Note: If you’d like to save time and have the foreign qualification paperwork taken care of for you, many of the best LLC services can handle this task for you.

What happens if I fail to foreign qualify before doing business in Connecticut?

Foreign qualifying is essentially asking permission to do business in the state of Connecticut. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in Connecticut yields consequences that are far costlier than registering in the first place. If you fail to foreign qualify, your business:

• Will be barred from maintaining an action or lawsuit in Connecticut courts
• Can be stopped from doing business in the state by the attorney general
• Will owe the state the total amount of fees and LLC taxes it would’ve paid had it been properly registered
• Will be charged $300 per month the LLC has been transacting business without foreign qualifying (this does not apply if you qualify your LLC within 90 days of starting your business in the state)

Let’s add up those penalties. If, for example, you’ve been doing business in Connecticut for two years, that’s 24 months of transacting business without foreign qualifying. At $300 a pop, that comes out to $7,200, and we haven’t even added the retroactive fees and taxes yet. Plus, the Secretary of State could cut off your business operations, leaving you without any income in the state. Compared to those penalties, the $120 foreign qualifying fee doesn’t seem that bad.

Take a deeper dive into the possible penalties in the Connecticut Uniform LLC Act Sec. 34-275.

What is considered “doing business” in Connecticut?

We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Connecticut? The state’s LLC Act doesn’t give specific examples, but you are considered to be “doing business” in most states and required to foreign qualify if:

• Your LLC has a physical presence — like stores, offices, warehouses, etc. — in the state.
• Salespersons or representatives are operating on behalf of your business in the state.

Depending on how your LLC is structured, you may also need to pay specific business taxes in Connecticut. Foreign qualifying notifies the state that you’ll be paying these taxes. If not, you will be liable to pay them, plus any late fees, later. It’s important to always stay on top of your LLC’s taxation requirements to avoid any unwelcome surprises.

If you’re unsure whether or not you need to file for a foreign qualification in Connecticut, we suggest seeking legal counsel.

Could I be exempt from foreign qualifying in Connecticut?

The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Connecticut. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:

• Settling, defending, maintaining, or mediating an action or proceeding in a Connecticut court
• Carrying on activities related to internal affairs, such as LLC member (see definition) or manager meetings (see manager definition)
• Maintaining accounts at financial institutions
• Selling products or services through independent contractors
• Soliciting or obtaining orders outside the state
• Creating or acquiring debt
• Transacting business in interstate commerce
• Conducting a single transaction that is unrelated to other business operations
• Voting securities or other equity ownership interests
• Owning, without more, property

We strongly advise checking out the more detailed list of exemptions located in Connecticut’s LLC Act, Sec. 34-275. If upon reviewing the list, you find your only Connecticut business operations included, you likely do not need to foreign qualify your LLC. But if you’re at all unsure, it’s best to seek legal advice.

How to Foreign Qualify Your LLC in Connecticut

Foreign qualification in Connecticut is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC, your ticket to doing business in Connecticut is the “Foreign Registration Statement.” The most efficient way to file for registration is through the Secretary of State’s Online Filing System.

But mail is a viable option too. Download the form from Connecticut’s LLC forms database, then mail it, along with your payment, to:

Business Services Division

Connecticut Secretary of State

P.O. Box 150470

Hartford, Connecticut 06115-0470

Live near Hartford? You can also hand deliver it as part of your daily errands. Drop it off at:

165 Capitol Ave.

Suite 1000

Hartford, Connecticut 06106

The fee for foreign registering your LLC is $120, which you pay by check (by mail or in person) or by credit/debit card (online). Make checks payable to the “Secretary of the State.” Typical processing time is 3-5 business days after receipt for online filings, while filings submitted on paper forms can take several weeks, but if you need it quicker, you can file an “Expedited Service Request,” which costs an additional $50 and guarantees a 24-hour turnaround.

After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on the way to being foreign qualified and you’re embarking on another chapter in the life of your business.

Connecticut Secretary of State Contact Information

Name Requirements to Remember

You likely checked to make sure your LLC name was available in Connecticut, but you should also confirm that your name follows the state’s business naming requirements. Make sure that your name:

• Uses a signifier that identifies it as a limited liability company, like L.L.C., LLC, Ltd., etc.
• Does not use terms that would mislead the public as to its function. For example, if you run a florist business, you shouldn’t call your business “New Company Financial Services.”
• Is available and distinguishable in the Secretary of State records from the name of other registered or reserved business entities. Perform a Connecticut LLC name search to make sure the name you want is available.
• You can also reserve your Connecticut business name if you’re not quite ready to foreign qualify your LLC.

Refer to the Connecticut LLC Act, Sec. 34-243k for additional details regarding business name restrictions.