Wednesday, October 12, 2011

Does Band LLC Need to Register in Surrounding States?

Dear Rich: I was considering choosing an LLC as my band's business form. I live in Missouri and would file articles of organization in my own state. My state borders on eight other states. Do we also have to file articles of organization for a foreign LLC in other states in order to play gigs there? No, you would only have to qualify if some portion of your band business was conducted solely in the other state – for example, you operated a practice space or maintained a warehouse of your merchandise or if you were booked for several months straight in a club in another state. Only LLCs and corporations that conduct this type of intrastate business have to qualify in another state. You – and most bands – conduct interstate commerce. You may conduct business across state lines but, for example, you don’t plant yourselves, your employees, or your inventory solidly within another state’s borders for extended periods of time.
What does it mean to qualify in another state? If a business must qualify as a “foreign” corporation, that means the company must file some paperwork, pay some fees, and then pay taxes each year to the other state. Here's an article summarizing all this and you can learn about each state’s rules for qualification at the state’s website for its Secretary of State.