Not foreign like from another country coming to Ellis Island foreign (picture for dramatics). I am referring to foreign as in operating your business in another state foreign. As I talk about in my previous blog articles, one of the great things about investing in notes is that you can do it from anywhere and in any state.
Recently I purchased two mortgage notes in states other than where my business is registered. I was listening to another investors podcast and it was on the topic of registering your business in the state where you bought the note.
As I listened, they discussed the fees that some states fine you when you register late or do not register at all. Well, I got a little nervous because it had been some months since I had purchased my notes and finally received the collateral files and got them recorded. This should not have stopped me from registering though.
Of course, each state has different timelines and different fines. Lo and behold I had to get a registered agent, pay a fine for being more than 60 days behind on registering and had to file a Business Privilege Tax to boot! Well, I am all legal and registered now and taxes paid up too.
Thank goodness it was early enough in the game and now I can add this to the checklist of things to keep on top of going forward. On the topic of registered agents…when doing business in a state that is not your business home state, you will need a registered agent.
This can be an attorney in that state or other registered agent companies that are residents of the state you are doing business in. In the event you are served with legal documentation or need other important documents like taxes, etc., your registered agent acts as your representative to ensure that you are properly notified and receive those documents.
One last thing, different entity types are treated differently as well. As a sole member LLC my company was treated as a “disregarded entity”. Other entities such as Partnerships, Corporations, and entities taxed as corporations are treated differently. Be sure to consult with your attorney and tax professional if you are unclear when registering as a foreign entity in another state.
As always, stay safe out there!
For more information on notes or if you have notes to sell, reach out to Zee at Awanna
Holdings, LLC (571)659-5005. ©Awanna Holdings, LLC (Nov 2020-22), zee@awannarandh.com www.awannarandh.com
https://www.meetup.com/NoVa-Notes/