Foreign Qualification (Foreign Registration)
Foreign Qualification / Registration (also Certificate of Authority or Application for Authority to do Business) is a filing made with a Secretary of State’s office. If a corporation does business in any state(s) outside of its state of incorporation, it will be required to register as a foreign corporation in the states where they are also doing business. Typically, if your business has an office, employees, or does advertising in a non-domestic state, foreign registration is required.
Registering your corporation or LLC as a foreign corporation allows you to legally conduct business in states not incorporated in. This eliminates the need to form a new corporation in each state that you have decided to conduct business.
However, every state has different rules and requirements regarding exactly what constitutes “doing business”. Therefore, CorpCo® recommends that you contact either the Secretary of State’s office or a tax/legal professional. They will be able to help you to determine if your activity constitutes “doing business” in a given state.
Many Delaware Corporations and Delaware LLCs do business outside of the state. If you determine that you must register to do business in any state or in the District of Columbia, CorpCo® can assist you with this process.
Frequently Asked Questions
What is a qualification?
If a corporation, Limited Liability Company (LLC), or other business entity conducts business in any states other than the state of incorporation/formation, it may be required to register the company in those states in order to legally conduct business there. This registration process is referred to as “qualifying” or “registering” to do business as a foreign corporation.
How do I know whether my company needs to qualify (register to do business) in another state?
Generally, a company will be required to qualify in the states where it is “doing business” outside of its home state of incorporation/organization. Each state has its own definition of what that means, but typically “doing business” consists of recurrent and continuous business transactions in that state. In that regard, a company may be considered “doing business” in a state where it has a bank account, a physical office, employees, and/or advertises. We recommend that you consult with a qualified professional (accountant or attorney) to determine whether your activity constitutes doing business in a given state before proceeding with registration. If registration is determined to be necessary, CorpCo can assist in registering your company in any state in the US or the District of Columbia.
How do I qualify (register my company to do business) in a another state?
Requirements for qualification vary from state to state. However, it is most common to be required to complete and file a foreign registration (also known as Application for Authority or Foreign Qualification in some states) with the Secretary of State’s office. Other typical requirements include a Certificate of Good Standing, and/or a Certified Copy of the incorporation/formation documents from the domestic (home) state, as well as a registered agent and office in the state(s) in which the qualification is being filed. CorpCo can assist with the preparation and filing of these documents, as well as provide registered agent services and supporting document retrieval in all states.
What could happen to my business if my company doesn’t qualify/register in a state where it does business?
Many states will assess a penalty fee and/or require back taxes to be paid for the time frame during which the company was conducting business in that state without being formally registered there. There may be further complications and potential liability concerns if the company is sued or requires use of the courts in that state as well.