Do I Need to Register My Business in Multiple States?

March 17, 2020
Should you register your business in multiple states?

Most business owners start their business where it is most convenient. They often choose to incorporate in the state where they live. But what if your business activities are not that simple? Many companies conduct business out-of-state, have partners or employees in different parts of the country, or have online sales. The simplest of procedures can complicate the legal processes involved in running a company. Thus, if you are carrying out business in a state other than where you incorporated, you may be required to register in that state.

Here are some examples of instances that may define “doing business” in another state:
  • Having a physical presence in the state, like an office, store or a warehouse.
  • Holding property in the state.
  • Having paid employees in the state.
  • Applying for a business license in the state.
  • Conducting regular in-person meetings with clients in the state.
  • Holding a bank account in the state.

Conducting online business, where you sell and ship products to different states does not always require extra registration. However, when your business fits into any of the above examples, chances are you will be required to register in that state. This is where foreign qualification comes in.

Foreign qualification is how you register to do business in states other than your state of incorporation. The process allows you to notify the state that you will conduct business operations within its borders. To foreign qualify your company must submit a Certificate of Authority application with the state’s Secretary of State office.

The paperwork is relatively straightforward. However, some states will require that you have a certificate of good standing from your state of incorporation. Therefore, it is necessary to ensure that your company is up to date on all required filings.

Still have questions? An accountant or attorney is always your best resource for advice and to make recommendations for your business. Contact CorpCo for a referral or with any questions about the incorporation process itself.  We are here to help!