I formed a West Virginia LLC last year for a small consulting gig, but now I'm looking at buying a rental duplex in Ohio. Does anyone know if my WV LLC can legally hold title to property in another state, or do I need to create a separate entity there? I'd rather not pay for two sets of registered agents if I can avoid it.
Real Estate
Can a West Virginia LLC own rental property in another state?
Yes, a WV LLC can own property in Ohio. The bigger issue is that you'll likely need to register your WV LLC as a foreign entity in Ohio. That meanns filing a foreign registration and paying their fees, plus keeping a registered agent in Ohio.
What TaterTot said. It's not about whether the LLC can own it, it's about the state where the property sits wanting the LLC to register to do business there. Ohio will want to know you exist.
So I'd keep the WV LLC and just add an Ohio foreign registration? That sounds cheaper than forming a whole neew LLC. Does the foreign registration need its own EIN or anything?
No new EIN. Same entity, same EIN. But check with a CPA on the Ohio tax side, because rental income there may require an Ohio tax filing even if the LLC is from WV.
I did something similar a few years back, WV LLC buying a rental in PA. The foreign registration was straightforward. The part that caught me off guard was the local rental license and the property tax office wanting the LLC's info updated. Nothing legal stopped it, though.
One thing people overlook is the operating agreement. Make sure it actually permits owning real estate in other states. Most boilerplate ones do, but if yours is narrowly written for consulting, it might not.
Also worth thinking about liability. Some people prefer a separate LLC per property in the state where it sits, but that's a cost decision, not a legal requirement. A single WV LLC with an Ohio foreign registration is perfectly legal.
GrumpyYardGnome makes a good point about the operating agreement. Mine had a purpose clause that was broad enough, but I had to amend it anyway for an unrelated reason, and my attorney said it was smart to spell out real estate holdings.
For what it's worth, the Ohio Secretary of State website has a foreign registration form and the fee is pretty low. I'd start there before paying anyone to do it for you.