Can I flip homes in Illinois with an LLC I have set up in North Carolina?

Question

Hey everyone, recently got out the military and was located in North Carolina. Was originally going to stay out there so I made an LLC to invest with in North Carolina. Ended up coming home to the Chicago area and now I'm not sure if I can use my LLC to flip homes in Chicago or if I need to disband it and create a new one through Illinois or just transfer my current one from North Carolina to Illinois? Preferably would like to just keep my current one if there's no legal issues. Thanks for any feedback!

Patricia Steiner · Answer

Here you go:  "Any foreign LLC that wants to do business in Illinois will need to file an Application for Admission to Transact Business with Illinois's Secretary of State (SOS), Department of Business Services, Limited Liability Division."  The term "foreign" refers to LLCs formed/held out-of-state.

Best...

Jonathan Klemm · Answer

Hey @Jack Domek - Seems like you got the answer you needed above.  I just wanted to chime in to say you should connect with @Edgar Barbosa who is also a military vet here in Chicago.

Also, my buddy @Doug Spence has a business that specifically works with veterans to help educate them on real estate.

I am here in Chicago too and happy to help out in any way that I can.

John Warren · Answer

@Jack Domek definitely this is something you should be talking to an attorney and an accountant about, but I think the general advice will be to set up an Illinois LLC for work here. It is pretty simple stuff to set up a an LLC here. I would imagine it will be harder to find a deal than it will be to set up that LLC.

Hamp Lee III · Answer

Welcome to BP!

I'm active duty Air Force and a third-generation real estate investor. Let me know if I can help or share any info.

I wish you all the best in your investing journey!

Jason Marino · Answer

Hi Jack,

I agree with the replies above that note that the LLC should be from Illinois or registered to do business in Illinois as a foreign entity. These are the best options if you are doing business or in a grey area where you may be doing business in another State. Not having an LLC from that State or registered to do business in that State can lead to fines, and, worse than that, if the LLC is involved in a lawsuit, it may be disregarded as it did not comply with the State's requirements to be able to do business in the State.

Bud Gaffney · Answer

I would think this is no problem! But I would reach out to a RE attorney for the best advice on this :)

Crystal Smith · Answer

Our LLCs are registered in Nevada, Wyoming, and Illinois. We use to flip properties in Illinois using our Nevada LLC. The only thing required is to register the LLC as a foreign entity in the state of Illinois.  It's not that big a deal.  Just an increase in paperwork.

The only reason we established the Illinois LLC was to take advantage of the Illinois Series LLC laws as we had multiple properties being flipped simultaneously and did not want it all under one LLC.

Jordan Clark · Answer

Congratulations on your return home and starting your own business! Regarding your LLC, whether or not you can use it to flip homes in Chicago will depend on a few factors.

First, you will need to determine if your North Carolina LLC is authorized to do business in Illinois. This means that you will need to register your LLC with the Illinois Secretary of State's office as a foreign LLC. This process typically involves submitting an application and paying a fee. Once you are registered, your North Carolina LLC will be authorized to do business in Illinois and you can use it to flip homes.

However, there may be other factors to consider, such as whether your North Carolina LLC is structured in a way that is advantageous for your business in Illinois. For example, different states have different tax and liability laws that can impact how you structure your LLC. You may want to consult with an attorney or tax professional who is familiar with the laws in both North Carolina and Illinois to determine the best course of action for your business.

Alternatively, you may also consider dissolving your North Carolina LLC and forming a new LLC in Illinois. This can be a more straightforward option and can ensure that your LLC is structured in a way that is optimal for your business in Illinois.

In any case, it's important to make sure that your LLC is compliant with all relevant laws and regulations, both in North Carolina and in Illinois. This can help ensure that your business is legally protected and can operate smoothly.

Eudith Vacio · Answer

Hey @Jack Domek - it might just be cleaner to start a new LLC in Illinois and honestly it’s super easy to do and only costs $150 and you get your EIN super quick online afterwards

Yocheved Beer · Answer

@Eudith Vacio how do you set up a LLC in Illinois for 150 dollars?

Can I flip homes in Illinois with an LLC I have set up in North Carolina?

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