Does an online business need Foreign Entity registration in all 50 states?

[TheDapperLove]

I understand entity creation and most of what envelopes that. To any drop shipper or Shopify that can point us in the right direction would be appreciated. I do have a meeting set up with a lawyer to make sure we are legally secure. My question would be this if anyone has actually done this:

- LLC formation will be in Delaware/Nevada, I physically live in another state. Did anyone have to register a Foreign Entity in all 50 states even if the business is online? Does anyone have experience with this?

[DaisyVo]

Hi @TheDapperLove 

I see where you're coming from, and it's great that you're already consulting a lawyer to ensure everything is legally sound. From what I understand, you're asking whether an online business—especially a dropshipping one—needs to register as a Foreign Entity in all 50 states if your LLC is formed in Delaware or Nevada but you live in another state.

The Short Answer

No, you don’t need to register as a Foreign Entity in all 50 states just because your business operates online. However, you may need to register in specific states where you have a "nexus," meaning a substantial business presence.

When Do You Need Foreign Entity Registration?

You might need to register in a particular state if:

1. You have a physical presence there (office, warehouse, employees).
2. You actively sell to customers in a specific state and meet economic nexus thresholds (e.g., $100K+ in sales or 200+ transactions in many states).
3. You collect and remit sales tax there (some states require entity registration for tax purposes).
4. You have employees, contractors, or business assets in a state (such as a warehouse for storing inventory).

For a Typical Dropshipping Business?

• If you’re running a standard Shopify dropshipping store with no physical inventory or employees in other states, you likely only need to register in your home state (or the state you formed your LLC in, like Delaware/Nevada).
• Sales tax nexus is what you should watch out for—if you exceed a state's threshold, you might need to register for tax purposes but not necessarily as a Foreign Entity.

What Should You Do?

• Confirm with your lawyer (which you’re already doing—good move).
• Check the economic nexus laws for states where you have significant sales (Shopify’s tax settings can help with this).
• Monitor where your business presence grows—if you start hiring employees or renting warehouses in a specific state, you may need to register there.

If you need any other assistance, feel free to ask, and I will try my best to support you.
Best regards,
Daisy.