Kentucky Foreign Registration›When to register
What counts as transacting business in Kentucky for a foreign LLC
A foreign LLC must hold a certificate of authority, which costs $90, before it transacts business in Kentucky. The statute does not define the phrase. It gives 11 activities that do not count, says outright that the list is not complete, and keeps tax and service of process out of the question.
The rule and its consequence
Start with KRS 14A.9-010, which bars a foreign entity from transacting business in the Commonwealth before it holds a certificate of authority. KRS 14A.9-020 supplies the consequences. The entity owes $2 for each day and cannot sue in Kentucky courts, and a judge hearing a case it files may put it on hold until the certificate question is resolved. Acts it has already performed stay valid, and nothing stops it from defending a suit.
The eleven things that are not transacting business
Kentucky gives these as examples of activity that does not trigger the rule. They sort into four groups.
Staying out of the market. A Kentucky bank account. Holding real or personal property and doing nothing further with it. Trade that crosses state lines, as interstate commerce.
Selling from outside. Distribution through independent contractors. Gathering orders by mail, employees or agents, so long as each order must be accepted outside Kentucky before a contract exists.
Lending and collecting. Taking on or granting debt, with a mortgage or other security or without one. Chasing a debt, enforcing a mortgage or security interest and handling the collateral afterward.
Internal and litigation matters. Governance meetings of owners, managers, directors or trustees. Bringing, defending or settling a lawsuit. A transfer or registration office for the entity's own stock or interests, with trustees or depositaries to match. A lone deal wrapped up in 30 days that is no part of a repeating pattern.
The list is open-ended, and narrower than tax
By its own terms the list is not exhaustive, so other activities can also fall outside the rule, and subsection (5) adds that the list does not decide which contacts expose a foreign entity to service of process, taxation or other regulation. A company can therefore need no certificate and still owe Kentucky tax, or the reverse. This site covers the certificate.
Partnerships, insurers and state contracts
Three special rules sit at the end of the section. A foreign general partnership is mostly outside it. A foreign limited liability partnership that is transacting business uses a statement of foreign qualification in place of a certificate. A foreign insurer with a certificate from the Department of Insurance is exempt. And a foreign entity seeking eligibility for a state contract under the procurement chapters must hold a certificate or a statement of foreign qualification.
Situations, read against the list
An employee working from a Kentucky home. Staff who work in Kentucky week after week are not an isolated transaction and not interstate commerce in the ordinary sense. The list does not cover them, so registration is the careful answer.
A warehouse or stock held in Kentucky. Owning property without more is excluded, but a warehouse that ships to customers is more than owning. Registration is the safer path.
A customer who orders by phone. If the order is accepted at the home office, it fits the order-taking exclusion. If a Kentucky office accepts it, it does not.
A single repair job. A job completed within 30 days and not repeated fits the isolated transaction item. Another one soon afterward puts that in doubt.
Rental property. Owning a building is excluded on its own. Managing tenants and collecting rent is more than owning.
A sale to a Kentucky agency. If it is under the procurement chapters, the entity needs a certificate to be eligible whatever else it does here.
Why some companies register without being sure
The cost of registering is $90 and a yearly $15, which the daily penalty alone overtakes in under two months. For a company that sells to Kentucky agencies, leases space or has staff here, registering settles the question.
Registering against waiting
Registering costs $90, then $15 a year for the report. Waiting costs $2 for every day of business without a certificate, and that charge keeps running until the application is filed, while the bar on suing in Kentucky courts applies for the same period.
What registering does not change
A certificate of authority does not make the LLC a Kentucky company, and it does not give Kentucky the right to regulate the LLC's internal affairs. It gives the LLC the same rights as a Kentucky entity of like character, with the same duties and penalties. Registering also does not settle Kentucky tax.
A short test for your own facts
Write down the Kentucky activity
What is done, by whom, where, how often.
Match it to the list
Every part of the activity has to be covered by an item.
Check the special cases
Partnership type, insurer status and state contracts.
Count the days
An isolated transaction ends inside the stated period and stands alone.
Ask a lawyer if close
And register if the test fails.
Transacting business questions
Does owning Kentucky real estate make me register?
Plain ownership is on the exempt list. Operating the property as a business may go further.
Can I hold a board meeting in Kentucky unregistered?
Yes. Meetings concerning internal affairs are excluded.
Is a website sale to a Kentucky buyer transacting business?
Interstate commerce is excluded, but stock, staff or an office in Kentucky change the analysis.
Our fee and Kentucky's
Start my Kentucky filing
KY+ $90 Kentucky fee
$199
- Form FBE, the Certificate of Authority (Foreign Business Entity), completed from your answers
- The signed statements Kentucky wants from your agent and your authorized signer, collected for you
- A Kentucky registered office and agent: ours, or the ones you already use
- Online submission through FastTrack, the file-stamped record, and the county clerk copy prepared
- Renewal: after the first year, the agent service renews at $149 a year
Kentucky's $90 is its own line at checkout. The county clerk bills separately for its copy. $199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.
Sources
- Kentucky Secretary of State, business filing fees
- Kentucky FastTrack, apply for a certificate of authority
- KRS 14A.6-010, annual report
- Kentucky Form FBE, certificate of authority for a foreign business entity
- KRS 14A.9-010, authority to transact business required
- KRS 14A.9-020, consequences of transacting business without authority
- KRS 14A.9-050, effect of a certificate of authority
Working in Kentucky already?
Every day without a certificate adds to the penalty meter. Start the filing today.