Im wanting to start a LLC in Alabama, but also want to invest in Illinois. Is it possible to purchase property in Illinois under an Alabama LLC and if so, is that wise to do so? Or should I get two separate LLCs?
@Lamontis Gardner Pros and Cons to each, and lots of in between options. Would for sure get legal and CPA involved in this discussion, as it can have legal and tax implications.
For the sake of general info though... on the basic end for what you're describing you could do a foreign qualification in Illinois, which at a base level means that you're operating in the state, but headquartered elsewhere. If you made a second LLC in Illinois, then you're two separate entities, one business in each state, following separate legal rules for how to operate them. You then could have a blend of these where you could make two separate LLC's in each state, but then also nest them under a holding company in another state, such as Nevada or Delaware, for example.
@David Martin thanks David. Sounds interesting. I’m gonna call up a CPA and speak with them about it as well.
Registration: LLC in its home state is registered as a domestic entity. When the LLC does business in another state it must then register in the new state as a Foreign entity. So multiple registrations and you will also have to pay a registered agent in the new state as well as the filing fees as a foreign entity.
Taxation: The LLC will need to file a Federal tax return, Home State tax return and additional state tax returns for every state it does business in. Domiciled in IL and doing business in MO and Indiana. That totals 3 state returns and 1 Federal return.
If you want Charging Order Protection Entity (COPE) status make sure your LLC is established in a state that provides COPE. Illinois does not offer that protection.
If you create an LLC in Alabama and want to purchase a property in Illinois, the title company/Attorney in Illinois will ask you to register the Alabama LLC to do business in Illinois. They will not close without you doing so.
Alternatively, you can open up a new LLC or only one LLC in Illinois(if you don't plan to do any activity in Alabama.