Operating in multiple states

Asked by: Sean  — 28 September, 2012

Starting a business, living/working out of home in MN, contracts and employees possibly in AZ, and CA. Which state makes sense to incorporate in, and what is best method for business licenses in other states?

Answered by: admin  — 28 September, 2012


When you have a company registered, for example, in Minnesota, and you have employees in other states, this creates what is considered a nexus of your business in those other states, respectively.

To operate your business, and obtain any necessary licensing in multiple states, you would have to file your business as a foreign entity in each state where you had a strong nexus, such as employees, offices, conducting the business in person, etc.

Typically it would make the most sense to incorporate the business in your home state, in this case registering your business in Minnesota, then filing the company as a foreign entity in other states as the need arises. Once your company is filed as a foreign entity, you could then apply for any necessary licenses or permits in each state.

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