For more information scroll down to the bottom or click here! Which Law Applies to Foreign LLCs? The Law of the State of Formation Travels with an LLC! Unlike the rules pertaining to corporations that do business in states outside of their places of formation, the rules for LLC's are crystal clear. A state-by-state review of all 50 state statutory schemes reveals that each has a statute that applies the law of the state of formation to all issues involving "organization" and "internal affairs." As regards issues of "liability" for members, 49 out of 50 also will use the law of the state of formation. The only exception is Montana.Because of the above, it can truly be said that the law of the state of formation travels with an LLC. This can be advantageous, depending on the particular issue involved.While these statutes are very clear on their face, no case has yet arisen in any state wherein a court has had occasion to interpret the language and decide whether the issue at hand falls within "internal affairs" or one of the other two categories. This is not surprising, given the fact that LLC's are a relatively new form of business entity. For comparison purposes, I checked California's Limited Partnership Act. It includes a statute, Cal. Corps. Code § 15691, which applies formation state law to foreign limited partnerships doing business in California, on all issues of "organization," "internal affairs," and "liability." Although this statute is older than any of the LLC statutes under discussion, it has never been used by an appellate court in a published opinion. Obviously, it would be difficult to find a fact pattern wherein a California court would have to rule on an "internal affair" matter of a foreign limited partnership doing business in that state. While such issues have arisen in cases involving corporations, they are relatively rare. See, e.g., Wilson v. Louisiana-Pacific Resources, Inc., 138 Cal. App.3d 216, 187 Cal. Rptr. 852 (1982); Valtz v. Penta Investment Corp., 139 Cal. App-3d 803, 188 Cal. Rptr. 922 (1983).Given the clear language of the LLC statutes in all 50 states, if such cases do arise, the law of the state of formation will be applied. The following chart shows the LLC laws of all 50 states regarding their coverage of foreign LLC's. O= Organization IA= Internal Affairs L= Liability L1 Alabama § 10-12-46 O IA L 2 Alaska § 10.50.265, .600 O IA L 3 Arizona § 29-801 O IA L 4 Arkansas § 4-32-1001 O IA L 5 California § 17450, Cal. Corps. O IA L 6 Colorado § 7-80-901 O IA L 7 Connecticut § 34-222 O IA L 8 Delaware § 18-901, Tit. 6 O IA L 9 Florida § 608.505 O IA L 10 Georgia § 14-11-701 O IA L 11 Hawaii § 428-1001 O IA L 12 Idaho § 53-650 O IA L 13 Illinois 805 ILCS, 180/45-1 O IA L 14 Indiana § 23-18-11-1 O IA L 15 Iowa § 490A.1401 O IA L 16 Kansas § 17-7636 O IA L 17 Kentucky § 275.380 O IA L 18 Louisiana § 12:1342 O IA L 19 Maine § 711, Tit. 31 O IA L 20 Maryland § 4A-1001 O IA L 21 Massachusetts § 47, ch. 156C O IA L 22 Michigan § 450.5001 O IA L 23 Minnesota § 322B.90 O IA L 24 Mississippi § 79-29-1001 O IA L 25 Missouri § 347.151 O IA L 26 Montana § 35-8-1008 O IA   27 Nebraska § 21-2637 O IA L 28 Nevada § 86.543 O IA L 29 New Hampshire § 304-C:62 O IA L 30 New Jersey § 42:2B-52 O IA L 31 New Mexico § 53-19-47 O IA L 32 New York § 801 LLC O IA L 33 North Carolina § 57C-7-O1 O IA L 34 North Dakota § 10-32-135 O IA L 35 Ohio § 1705.53 O IA L 36 Oklahoma § 2042, Tit. 18 O IA L 37 Oregon § 63.714 O IA L 38 Pennsylvania § 8981, ch. 89 O IA L 39 Rhode Island § 7-16-48 O IA L 40 South Carolina § 33-44-1001 O IA L 41 South Dakota § 47-34A-1001 O IA L 42 Tennessee § 48-246-101 O IA L 43 Texas § 7.02, art. 1528n O IA L 44 Utah § 48-2C-1601 O IA L 45 Vermont § 3131, Tit. 11 O IA L 46 Virginia § 13.1.1051 O IA L 47 Washington § 25.15.310 O IA L 48 West Virginia § 31B-10-1001 O IA L 49 Wisconsin § 183.1001 O IA L 50 Wyoming § 17-14-1001 O IA L Ready to Incorporate? Call NCP Today! 1-800-351-5111 And You Will Avoid Costly Mistakes!

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