What a Business Needs to Do to Qualify as a Foreign Corporation
By Deborah Sweeney on March 08, 2013
When success strikes for a business, it’s only natural to want to continue taking the company to new heights whether that means adding on more employees, including fun company perks, or doing business in a new state. But how does a corporation legally conduct business in one state when it is incorporated in another? The answer is that the business needs to qualify (or register, depending on the state) as a foreign corporation.
So what does a business need to do to qualify as a foreign corporation?
1) Meet general state requirements.
The foreign corporation will be required by the Secretary of State to fill out a form called the Foreign Corporation Certificate or also sometimes known as the Statement and Designation by Foreign Corporation. These forms request the name of the corporation, the state of incorporation, the address of the principal office in the state of incorporation, the address of the principal office in the foreign state and the name and the address of the registered agent for that state. Some states may want more information than just that so it’s important to refer to the specific Secretary of State to get more details.
2) Maintain a Certificate of Good Standing.
This is also sometimes referred to as a Certificate of Authorization or Certificate of Existence. The certificate is filed by the foreign corporation along with the form I just finished describing and used as evidence that the foreign corporation exists and is authorized to do business in that foreign state. A state official will issue the certificate from the state of incorporation as well.
3) List assets and liabilities.
Requirements vary state by state and some states may need the foreign corporation to list its assets and liabilities and the assets and liabilities within the state it wants to qualify to conduct business in.
4) Remember the filing fee!
There’s a filing fee for registering as a foreign corporation – be sure to check in on the exact pricing of said fee.
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