Foreign LLC
An LLC formed in one US state that is registered to do business in another US state.
Definition
In US state law, 'foreign LLC' refers to an LLC whose state of formation is different from the state where it operates. The terminology does not refer to non-US ownership. A Delaware LLC operating in California is a foreign LLC in California.
Context
When a Delaware LLC has nexus in another state (physical presence, employees, substantial sales), it must foreign-qualify in that state to legally do business there.
Example
A Delaware LLC owned by a Bangladeshi founder operates entirely from Bangladesh. It has no nexus in any US state except Delaware. It is therefore not a foreign LLC anywhere; it is just a domestic Delaware LLC.
Common pitfalls
- Confusing 'foreign' (out-of-state) with 'foreign' (non-US-owned). They are completely different concepts.
- Failing to foreign-qualify when required can result in losing rights to sue in that state.