Can I Live in a Different State Than My LLC? What Changes When You Do

You still need a registered agent in the formation state

Every Texas LLC names a registered agent and a registered office. The Form 205 instructions say the registered office “must be located at a street address where service of process may be personally served on the entity’s registered agent during normal business hours.” Service of process means the delivery of court papers, such as a lawsuit.

Texas also limits what that street address can be. The same instructions say the registered office “may not be solely a mailbox service or telephone answering service (BOC § 5.201).” They also say “The limited liability company cannot act as its own registered agent.”

If you live in another state, you cannot be the agent in Texas yourself, because the individual agent must be a Texas resident. An owner who lives elsewhere can hire a registered agent business in the formation state. Other states set their own rules, so read the formation instructions of the state you chose.

When your home state wants a foreign LLC registration

A “foreign LLC” is an LLC formed in another state. A state asks a foreign LLC to register when the LLC transacts business there. The test looks at what the LLC does in that state, such as having an office or an employee there.

Texas explains its rule in plain words. Its Foreign Entities FAQ says “Texas statutes do not specifically define ‘transacting business;’ however, section 9.251 of the BOC lists 16 activities that do not constitute ‘transacting business.’” It then says “Generally, a foreign entity is transacting business in Texas if it has an office or an employee in Texas or is otherwise pursuing one of its purposes in Texas.” The FAQ adds that the Secretary of State “cannot give a legal opinion” about a particular business.

California uses the term “intrastate business.” Corporations Code section 17708.03(a) says a foreign LLC “that enters into repeated and successive transactions of business in this state, other than in interstate or foreign commerce, is considered to be transacting intrastate business in this state.” Section 17708.03(b) lists activities that do not count, including “Maintaining accounts in financial institutions” and “Transacting business in interstate commerce.”

If you run the business from your home, ask whether your home state treats that as an office or as business in the state. That answer depends on your facts, so an attorney in your state is the right person to ask. Our guide to foreign LLC qualification explains the triggers in more states. If you only want a trade name in another state, our guide to a DBA in a different state from your LLC covers that separate filing.

State tax where you live is a separate question

Registering with the Secretary of State and paying state tax are two different things. You can owe tax in a state where the LLC never registered.

Start with how the IRS treats your LLC. The IRS says a single-member LLC that does not elect corporate treatment is a “disregarded entity,” and “the LLC’s activities should be reflected on its owner’s federal tax return.” A domestic LLC with two or more members is a partnership for federal tax unless it elects to be taxed as a corporation.

Your home state then looks at you as a resident. California’s Franchise Tax Board says to California residents: “You are taxed on all income regardless of source.” So a California resident with a Wyoming or Delaware LLC still reports that income in California. Other states have their own residency rules.

California also taxes the LLC itself in some cases. The Franchise Tax Board says it considers you to be “doing business” in California if you meet any of its tests. One test is that you “Are organized or commercially domiciled in California.” The Franchise Tax Board’s LLC page says, “Every LLC that is doing business or organized in California must pay an annual tax of $800.” Ask a tax professional in your home state how these rules apply to you.

If you move to a new state with your LLC

You do not have to close the LLC when you move. There are three main routes. The right one depends on the laws of both states and on where the business will operate.

You can also leave the LLC as it is if the new state does not require a registration for what the LLC does there. The registered agent stays in the formation state either way. Our guide to moving an LLC to another state compares the choices in more detail.

1. 1Keep the LLC in its formation state and register it as a foreign LLC in the new state. You then keep a registered agent and file reports in both states.
2. 2Convert the LLC into an LLC of the new state, if both states allow it. The Texas Form 630 instructions say “Not all jurisdictions permit conversions. For a cross-jurisdiction conversion to be effective, the law of both jurisdictions must permit the transaction and be followed.”
3. 3Form a new LLC in the new state and close the old one. The new LLC is a separate company, so contracts, bank accounts, and tax accounts may need to change.

One Texas detail shows how the steps connect. The Form 630 instructions say a foreign entity’s Texas registration “is automatically withdrawn on its conversion” into a Texas entity type, as provided by section 9.012 of the Business Organizations Code.

Which address goes on which filing

An out-of-state LLC can have more than one address on record. Each one has a different job. If an address is out of date, state notices or court papers may not reach you.

California’s foreign LLC application shows the pattern. Section 17708.02(a) asks for “The street address of the foreign limited liability company’s principal office and of its principal office in California, if any.” It also asks for the agent’s name and street address in California, and “The mailing address of the foreign limited liability company if different than the street address of the principal office.”

Texas uses a separate mailing address for tax mail. The Form 205 instructions say “The initial mailing address is the address that will be used by the Comptroller of Public Accounts for sending tax information and correspondence to the entity.” They add that it “may be a post office box or street address.” Our guide to the three business addresses every LLC needs covers each address in more depth.

Each address field above has its own rule, so read the filing’s instructions before you list any address there. Our pages for a Silicon Valley virtual office and a Los Angeles business address describe the business addresses save office offers.