Does Your Small to Mid-Size Business Sell in Multiple States?

The world is becoming more connected than ever. Consumers can instantly buy goods from several states away with the click of a mouse. Employers are increasingly relying on remote workers who may live hundreds or thousands of miles from the company’s headquarters. This trend provides businesses and customers with opportunities they would not otherwise have access to. However, businesses that sell in multiple states must also contend with additional legal complications. Each state has its own rules, regulations, procedures, laws, and tax requirements. As a business leader, keeping up with all of these differences can be overwhelming and confusing. Furthermore, even a small mistake or oversight can lead to serious legal and financial implications.

Remaining Compliant When Your Business Operates in Several States

Business owners and business leaders should focus on growing their businesses. Unfortunately, many business leaders find themselves bogged down by confusing laws and regulations. For example, businesses that open a physical location in another state must register with that state. LLCs are considered domestic in the state where they were established and “foreign” in other states. Registering in additional states is called “foreign qualification.” This is just one example of the many concerns business owners operating in multiple states must deal with.

Business owners must also pay close attention to the permits and licenses required by each state they do business in. The types of licenses and permits you need depend on the industry and type of business. For example, restaurants and bars will need liquor licenses if they wish to sell alcohol. If your business involves the transportation of animals or animal products, you may need a permit from the USDA.

Taxes Become Increasingly Complicated with Each Additional State

Many small businesses eventually expand into neighboring cities and states. This type of growth is a good sign, however, it can mean significant tax implications. Businesses must file taxes in each state where the business has a nexus. For some business owners, this also means filing individual tax returns in multiple states. Employers with employees in multiple states must check each state’s tax requirements and ensure that they are remaining compliant.

Consider Utilizing Outsourced General Counsel to Avoid Mistakes

Taxes, permits, licenses, inspections, and industry-specific regulations vary from state to state. Keeping up with the requirements can leave a business owner mired by red tape. One way to relieve the burden and ensure that you do not make costly mistakes is to work with a general outsourced counsel (OGC). As a small or medium business, full-time in-house counsel may be impractical. However, you still need professional legal advice to ensure you are compliant with each state’s laws. Outsourced general counsel allows you to gain the legal guidance you need and avoid mistakes that harm your business’s long-term success.

Call Us For Help

When your business operates in multiple states, remaining compliant with each state’s laws and regulations is essential. For help, or to learn more about our outsourced general counsel program, YourOGC, contact the Naperville business law attorneys at the Gierach Law Firm. Call us at 630-756-1160 for a confidential consultation.

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Small Business Administration