So you're starting your work-from-home business and getting ready to register your business. If you are wondering if you need to register your business in just your home state or in other states as well, there are benefits and drawbacks when you register your business in other states. This short guide will go over the benefits.
The Advantages of Doing Business in Another State
Here are some examples of doing business in other states:
A larger customer base. Doing business in more states means more customers. In addition, other states may have a larger demand for your products and services. You may also find that other states have demands for different products and services you may wish to offer.
A larger employee base. Other states may have better trained or talented employees, and as such, doing business in other states gains you access to this employee base.
Conforming to State Laws
One of the benefits in registering your business in those states is so that you conform to state laws. If the state believes you are doing business in that state, they have the right to shut down your business in that state until such a time as you register your business. You may also be responsible for the payment of back taxes. So if there is any possibility that you might be considered doing business in another state, be sure to register with that state to save yourself some hassle down the road.
How Do I Know if I Am Doing Business in Another State?
Each state has different laws about what is considered "doing business." If you have any doubts about whether you might be doing business in a particular state, check with the laws of that state to see what they consider "doing business." Here are some examples of what some states may consider "doing business":
Having a bank account within that state
Selling to a customer in that state through a distributor, agent or representative of a manufacturer
Maintaining an office, store or manufacturing facility within that state's borders
Owning property in that state
Holding meetings or business transactions within that state
Your company employs personnel from that state
In some cases selling online to a customer in a state may be considered doing business there. This is not always the case, however, so check the laws in in states you wish to sell to ahead of time so as to be forewarned.
Doing business in other states can be advantageous to your company. It helps promote growth in both your customer base and employee base. To make sure that you are conforming to local laws, you will want to register your business in any state in which you plan to do business.