Rocket Dollar Knowledge Base

If my home state is not Colorado, do I need to register the default Colorado LLC as a foreign entity? Do I need to automatically register my LLC as foreign?

You do not need to automatically register your LLC as a foreign entity unless you are renting and purchasing property from a separate state. Further exceptions and descriptions below.

You do not always need to automatically register your LLC as a foreign LLC. For example:

Situation 1

A customer from Texas opens a Rocket Dollar account to invest in a limited partnership in Texas. Their Colorado LLC is opened.

This customer does NOT have to register their LLC as a foreign entity.

Situation 2

A customer from Texas opens a Rocket Dollar account to invest in a limited partnership in Arizona. Their Colorado LLC is opened.

This customer does NOT have to register their LLC as a foreign entity.

Situation 3

A customer from Texas opens a Rocket Dollar account to invest in a real estate property in Arizona. Their Colorado LLC is opened.

A: This customer does NOT have to register their LLC as a foreign entity as long as the property is not rented.

B: This customer should register their LLC as a foreign entity before they start renting it out to tenets. You can read more here. Most states have a grace period between 30-90 days as a registration deadline. It's best to complete this before or ASAP right after starting to intake rental income from a property.

Situation 4

A customer from California buys a few private placements and real estate property but does not rent out the property.

This customer MUST register their Colorado LLC as a foreign entity in the state of California due to local regulations. It does not matter if the property is being rented or not. You can read more about a California Self-Directed IRA here.

 

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