Your business is expanding beyond your local region. Or perhaps you are an Internet business with fulfillment centers in multiple locations. This may mean you are doing business in a “foreign” state. What do you do? We have the answers to all your questions regarding what constitutes doing business in another state and how to get the proper paperwork done to be legitimate.
Many confuse foreign qualification with the idea of operating outside the United States. This really has to do with how you perform within the borders of the United States. “Foreign,” in this case, refers to the fact that each state has operating rules that are different from one another; and, in turn, must insist on proper registration to do business in that locale.
Therefore, it is important that when your company is located in or operates within a state other than the place of original incorporation, you are given the proper rights to conduct business there. This actually means you need to obtain a Certificate of Authority.
We can take care of the details. Let Incfile help you file your Foreign Qualification today!
A corporation or LLC is only recognized in its state of incorporation. To be considered “foreign” in any state you must be domestic to another state, meaning your business was incorporated there. A Foreign Qualification results in a Certificate of Authority, which gives you legitimate rights to do business in the state. It is the process of registering an LLC or corporation that operates in a state outside the state of incorporation. A Foreign Qualification must be completed in each state that a corporation or LLC intends to conduct business.
What does it mean to “do business” in a state? Let’s discuss the activities that determine you are conducting business in another state.
Essentially, if your actions go beyond minor transactions in a state, such as making management decisions, you will likely be seen as a “foreign” entity that needs to register. However, there are some simple rules that help weed out the minor from the major “doing business” stature.
If your business fits any of these criteria, you could benefit from filing a Foreign Qualification with us.
If a company neglects to file the Foreign Qualification, it does not have legal standing or authority to transact business within that state. Every state has different rules regarding what constitutes transacting business. This could also effect your businesses Certificate of Good Standing, which you need to get a business loan, renew your business license or file your business taxes.
“Your goal is to be registered in each state that you do business.”
This requires filing on each state website for a Certificate of Authority. We know this can be cumbersome, so we’ve simplified the process. Simply complete our online Foreign Qualification form, and we’ll do the paperwork for you.
Every process has paperwork and proper steps to follow. To give you an understanding of what we’ll be doing on your behalf, let’s review the process below:
Certificate of Authority: Finally, you register for the right to do business in the state. This is similar to the process of incorporation and requires some paperwork and fees be submitted.
Typical criteria include but are not limited to:
Requirements to obtain or a Foreign Qualification / Certificate of Authority:
As your business grows we'll be there every step of the way to make sure that you have the
resources at hand to service your companies ongoing needs.