Registering As Foreign Corp In PA
I have a corp that is registered in my home state of NJ do i need to register as a foreign corp if I want to buy and sell properties in Pennslvania?
I dont know if i am reading it right but on the website for pa registeration it says that there are certain businesses that are exempt from registering to do business in PA.
General rule.---- Without excluding other activities that may not constitute doing business in this Commonwealth, a foreign business corporation shall not be considered to be doing business in this Commonwealth for the purposes of this subchapter by reason of carrying on in this Commonwealth any one or more of the following acts:
Inspecting, appraising and acquiring real estate and mortgages and other liens thereon and personal property and security interests therein, and holding, leasing, conveying and transferring them, as fiduciary or otherwise.
Foreign Corporations: In Pennsylvania, a “foreign corporation” is a corporation chartered or incorporated in a State or country outside of Pennsylvania. The Pennsylvania Business Corporation Law of 1988 provides that a foreign corporation, whether it has obtained a “certificate of authority” from the Pennsylvania Department of State, or not, will have the right to acquire, hold, mortgage, lease and transfer real and personal property in the Commonwealth in the same manner and subject to the same limitations as a domestic-business corporation. 15 Pa. Cons. Stat. Ann. § 4142(a)(1988) (granting foreign corporation with certificates of authority the same rights as a domestic business corporation.) 15 Pa. Cons. Stat. Ann. § 41`432(a)(1988) (granting foreign corporations with certificates of authority the same rights as a domestic corporation); and 15 Pa. Cons. Stat. Ann. § 4143(a) (granting non-qualified foreign business corporation the same rights to acquire, hold, mortgage, lease, and transfer real property as a qualified foreign business corporation).
While Pennsylvania law has removed the historic restrictions on the ownership of Pennsylvania real estate by foreign corporations, those entering into real estate transactions with foreign corporations should determine whether the foreign corporation is a validly-existing, legal entity in the foreign corporation’s state of incorporation. To this end, foreign corporations should be required to produce a “certificate of good standing” from the corporation’s home state. In addition, although foreign corporations need not qualify to do business in Pennsylvania (by obtaining a certificate of authority) in order to own real estate in Pennsylvania, without a certificate of authority on file with the Department of State, no corporate tax search or clearance certificate can be obtained because the Department of State would have no record of the foreign corporation paying taxes to Pennsylvania. Therefore, purchasers of real property form a foreign corporation should also require the foreign corporation to file a certificate of authority with the Pennsylvania Department of State and produce a clearance certificate at closing that evidences payment of all corporate taxes.
Can anyone make sense of this. I called business registration in harrisburg but there not aware of whats on there site and cant offer advice.
I would say it is quite clearly stated that you do not need to register to buy and sell properties. However buyers would not be able to get a tax clearance certificate from the Department of State.
Chris
thanks cjmazur, thanks chris
I could do that, get the attorney to do the other LLC and see how they compare.
I went to state web site in Fl to form the LLC
What do you mean the Revocable Trust "formed" your LLC?
How does that work?
[ Edited by LynLinz on Date 01/19/2008 ]
The owner of the LLC is the cjmazur living (revocable) trust. My living trust is the sole member.
I guess I was not clear.
You formed the LLC for asset protection reasons. I am saying that if you are a single member LLC and you are managing your own rental property that you put into the LLC, then the LLC is probably worthless for asset protection.
Consult your attorney for specific details.
Pass through tax advantages?? This just means that you pay the income taxes on your personal tax return, the same way you would if the LLC did not exist. How is this an advantage if it does not give you any tax savings ?
I have not had any problem purchasing a landlord dwelling policy for each rental property I own. State Farm has given me nine alone. Allstate once turned me down because I had filed a claim on one of my properties in the prior three years, otherwise they would have written me a policy. Nationwide has never turned me down nor has Lloyds of London.
If you are being turned down or being charged high (risk) insurance premiums, then maybe your personal credit score is the culprit. If your FICO is below their preferred underwriting threshhold, you will be turned down or put into a high risk category. If your FICO is the problem, it goes away when you raise your credit score.
Another
Sorry, let me clarify. I am able to get insurance polciies, just higher premiums than I expected so I am shopping around. State Farm was considerably high and only gives discounts with multiple policies. My FICO is also excellent.
As for the LLC, I currently own my own consulting business (LLC as well) so the expenses/income from the real estate LLC will flow through to my personal income from the consulting company and offset my income. I do still believe in separating assets and everything I have read and multiple lawyers have advised doing so with the LLC as well.
Excellent info Turnerg1!
That is a nugget of gold.
And which bank do you have your LLC business account with? I bank with Chase and have a multi-member LLC.
Have had it with them for 4 months sitting near enough idle with a minimum balance of $20k split into one savings and two checkings.
I am interested in a line of credit to pick up some rentals.
As for the LLC Insurance, American Family allows me to lump my four LLCs into one policy and my premiums are 50% of what they were separately. My attorney examined the policy and felt that the group policy didnt compromise the integrity of the individual LLCs and if they could somehow be penetrated in a lawsuit because of the group policy, then that is why I have insurance. Plus with the money I saved by doing insurance in a group LLC plan, I can afford to not skimp on insurance.
Somebody also was talking about transfering properties into an LLC. I know Wisconsin would hit you with a transfer tax for that even if it is going from your name into your LLC. Just something to think about.
Hi, Im no lawyer but this sounds like a good place for a series LLC. these can be formed in Deleware & Nevada. It is where 1 LLC has can have many properties each seperate from each other in liability. Look this up yourself for a better understanding.
SERIES LLC