Foreign Qualification

Corporations and limited liability companies (LLCs) are considered domestic companies in the state in which they are formed. In all other states in which these entities transact business (“foreign states”)  they are considered a “foreign” company. If your company expects to transact business outside the state of the company’s formation, the company may be required to qualify as a foreign corporation or foreign LLC in these foreign states.

Several considerations may be used to determine whether a company is transacting business in a foreign state. While the factors for determining what constitutes  “transacting business” differ among states, the most common questions include the following:

• Does the company have an actual physical presence in the foreign state?
• Does the company actually accept orders or provide a service in the foreign state?
• Does the company maintain employees in the foreign state?
• Does the company have a bank account in the state?

The process of qualifying a company to transact business in another state involves the filing for a certificate of authority or qualification in that state, together with the payment of required state filing fees. In addition, all entities which qualify in a foreign state are subject to taxes and annual reporting fees in both the state of formation and any states in which the company has qualified as a foreign entity.

Quick Incorporators’ complete foreign qualification services will provide the following:

• Preliminary name check in foreign state
• Preparation and filing of the certificate of authority or qualification
• Obtaining a certificate of good standing and/or any required certified copies
• Foreign state’s filing fees
• Expedited foreign qualification service at additional fee which varies by state