Foreign Qualifications
A corporation or limited liability company (LLC) is considered a “domestic” entity in its state of incorporation or formation. If the company transacts business in any other state(s), it must qualify or register “to do business”. In these other states, the corporation or LLC must register with the Secretary of State in order to transact or “do business” in this state. In each state other than the state of incorporation or formation, the entity is considered a “foreign” corporation or LLC.
Whether your entity must qualify or register to transact or do business in another state is a question of fact, depending upon the types and amount of contacts your company has with or in that state.
Each state has its own criteria to determine if an entity doing business in its state must qualify or register to do business there. Generally, if a company has substantial or continuous contacts within a state, then qualification or registration is likely required.
These factors could include:
- - having employees in the state
- - having a real estate lease and office in the state
- - having a bank account in the state
- - having an automobile registered in the state
There are many factors to consider in determining if qualification or registered is required or advisable. If your company’s contacts with a state are substantial or continuous or include one of the factors listed above, then registration or qualification is likely required. To determine if your business should qualify as a “foreign” corporation or LLC, you should contact your attorney or accountant to make a determination.
Please email Filings Made Easy at customerservice@FilingsMadeEasy.com or call Filings Made Easy at 888-237-3410 if you have any questions regarding foreign qualification matters or if you wish to engage Filings Made Easy to assist with qualifying your entity as a foreign corporation or LLC in one or more states.