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New York Foreign Registration › Doing business

Does a foreign LLC need New York authority? The four exclusions and the gray areas

A foreign LLC needs a certificate of authority, which costs $250 to obtain, once it is doing business in New York. The LLC Law does not define doing business. It names four activities that do not count, says other activities may also fall outside the rule, and says the list sets no standard for service of process. The Department of State declines to give opinions on the question.

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The sections involved

Three sections matter. Section 802 lets a foreign LLC apply for authority. Section 803 lists conduct that does not count as doing business: maintaining or defending a judicial, administrative or arbitration proceeding or settling claims, holding meetings of members or managers, maintaining bank accounts, and keeping offices or agencies only to transfer, exchange and register its own membership interests or to hold depositaries for them. Section 808 sets the consequences of doing business without authority. The citation for the list is N.Y. LLC Law 803(a).

The four exclusions in plain terms

Each describes an LLC that is only passively present. A court case, whether the LLC is plaintiff or defendant, and any settlement or arbitration, do not count. A meeting of members or managers held in New York does not count. A bank account does not count. And an office kept only to transfer and register the LLC's own membership interests does not count. Selling, hiring, leasing and performing work appear nowhere on the list.

Why the list is a minimum

Section 803 opens with the words "without excluding other activities that may not constitute doing business". The section does not say which other conduct, so the four items are the only listed safe ground.

The caveat about service of process

Section 803(b) adds that the list does not establish a standard of activities that may subject an LLC to service of process under the chapter or any other statute. Passing the test therefore tells you nothing about whether the LLC could be sued in New York, or taxed there. Those questions have their own rules.

What the Department will and will not say

The Department of State does not give opinions on what activities constitute doing business for qualification purposes. It points readers instead to a published opinion of counsel with the title "Doing Business" in New York: An Introduction to Qualification. So the call rests with the LLC and its adviser.

Situation: staff who live in New York

Employees are not mentioned in section 803, which means the statute offers no safe harbor for people based here and no number of them that triggers the rule. The answer turns on the facts: what the person does, whether they sign for the company and whether the company advertises an address in the state. A New York business lawyer can tell you.

Situation: leased space in New York

Renting a warehouse, studio or shop and operating from it is not among the four items. An LLC that does so has put a place of operation in the state, and applying is the safer course. The cost is $250 plus the publication steps.

Situation: customers and contracts

The list says nothing about contracts or deliveries. A company that bargains for, signs and carries out jobs in New York every few weeks is doing business on any ordinary reading. One that sells from outside the state to buyers here is the harder case.

Situation: a website selling into New York

Shipping goods to New York buyers from elsewhere is on the list neither as an exclusion nor as a trigger. Sales tax is another subject and falls to the tax authorities. Whether volume and nature of the sales amount to doing business is a question for counsel.

Situation: owning New York real estate

Holding title to a building is not one of the four. Collecting rent, managing tenants and paying its bills are the activities that resemble doing business. An LLC that buys property here to let should plan to apply before the first rent is paid.

Consequences of waiting

Section 808 keeps the LLC out of New York courts as a plaintiff until it holds a certificate, leaves its contracts standing, shields its members and managers from liability on that ground alone, and makes the Secretary of State its agent for claims from its New York business. The penalties page covers the detail, including the attorney general's part.

Weighing a borderline case

Apply where the LLC keeps premises, people or a steady income stream in New York. Stay out where all it does here is hold an account, meet, litigate or run a transfer office. In between, the downside is lopsided: $250 and the publication steps against a courthouse that stays closed.

Four checks on your own LLC

  1. Premises

    Do we lease or own space in New York?

  2. People

    Does anyone work for us from New York?

  3. Contracts

    Do we sign and perform work in the state?

  4. The list

    Is the activity a suit, a meeting, a bank account or a transfer office?

If you decide to apply

The guide sets out the order of work, the form walkthrough covers the application and the publication page covers the step after approval. We prepare the filing for $199.

Registered agent: first year included, then $149 a year

$199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.

Doing business questions

Does a New York bank account require authority?

No, bank accounts are on the short list of excluded activities.

Does a members' meeting in New York require authority?

No. Meetings of members or managers are excluded.

Will the Department say if I am doing business?

No. It gives no opinions on the question.

Does authority make the LLC liable for New York tax?

Taxation is outside section 803. An accountant can answer it.

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Our fee and the New York fee

Begin my New York application

  • The New York Application for Authority drafted from your replies
  • Your home-state certificate of existence checked for age before filing
  • A New York registered agent, ours or yours
  • The filed record emailed to you
  • Renewal: after the first year, the agent service renews at $149 a year
New York

$199

+ $250 New York fee (LLC)

Begin my New York application

New York charges $250 for an LLC, $225 for a corporation and $135 for a nonprofit. Publication for an LLC is a separate step with its own costs. $199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.

Sources

  1. New York Department of State, Application for Authority for foreign limited liability companies
  2. New York Department of State, Form DOS-1361-f-a, Application for Authority of a foreign LLC
  3. New York Department of State, fee schedules
  4. New York Department of State, Application for Authority for a foreign business corporation
  5. New York Business Express, foreign not-for-profit Application for Authority
  6. New York Limited Liability Company Law, section 803
  7. New York Limited Liability Company Law, section 808

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