Читать книгу Ultimate LLC Compliance Guide - Michael Spadaccini - Страница 39

This raises an important question: what constitutes “operations” or “business activity” in a particular state? As mentioned above, all states define it somewhat differently—but universally they define “doing business” broadly. For example, California defines it as “actively engaging in any transaction for the purpose of financial or pecuniary gain or profit.” It does not take a lawyer to get the crux of the meaning of that phrase. Quite simply, California interprets a single transaction taking place within its borders as “doing business.”

Why do states define business activity so broadly (thereby requiring local registration of foreign LLCs)? There are two reasons. First, registered LLCs pay lucrative filing fees and franchise fees. Second, as mentioned above, each state has an interest in protecting its consumers from unscrupulous out-of-state companies, LLC or otherwise. A state can better protect its consumers from misconduct by out-of-state businesses if the state has registration and contact information on file for each company operating within its borders. Furthermore, by registering, a company automatically submits to the jurisdiction in which it is registered, so it can be sued more easily.

The ULLCA provides a partial list of individual acts that do not constitute doing business. You will note that the ULLCA is far more lenient than California. It includes:

• Maintaining, defending, or settling any proceeding

• Holding meetings of the board of managers or members within the state or carrying on other activities involving internal governance matters, such as committee meetings

• Maintaining bank accounts

• Maintaining stock transfer offices

• Selling through independent contractors

• Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside their state before they become contracts

• Creating or acquiring indebtedness, mortgages, and security interests in property securing the debt

• Owning, without more, real or personal property

• Conducting an isolated transaction that is completed within 30 days and is not one in the course of repeated transactions of a like nature

• Transacting business in interstate commerce

States are seeking to expand the types of activities and level of business which constitute doing business. For example, businesses that rely heavily on mail order sales are under attack by several states that want to impose sales tax on mail order sales despite a U.S. Supreme Court case to the contrary. In addition, the Commonwealth of Massachusetts now seeks to impose its sales tax laws on vendors who come into the state to appear at trade shows. Previously, such an action would have been considered to be an isolated transaction.

▼ Good to Know

We have researched and compiled the fees and filing information for foreign qualification for all 50 states and the District of Columbia in the State Reference Information on the accompanying CD.

Any significant physical presence or large volume of income or expense attributable to a particular state is a good indication that the LLC is doing business in that state. If in doubt, consult your business attorney.