Filing a Foreign Qualification to Do Business Out of State

A Foreign Qualification refers to the process by which you register your company to do business in another state. An LLC or corporation is considered "domestic" in the state it was formed, and “foreign” in any other state in which it wants to do business. When you file a Foreign Qualification, you get a Certificate of Authority, which gives you legitimate rights to do business in the state. A Foreign Qualification must be completed in each state where a corporation or LLC intends to conduct business.

What does it mean to “do business” in a state? Let’s discuss the activities that determine you are conducting business in another state. Essentially, if your actions go beyond minor transactions in a state, such as making management decisions, you will likely be seen as a “foreign” entity that needs to register. However, there are some simple rules that help weed out the minor from the major “doing business” stature.

First, the company would have a physical presence in the state. This refers to the existence of an office, store, or warehouse that services or solicits residents of that state in any form. It could also refer to having employees or even bank accounts in a state.

Second, if your company has to pay state taxes in a particular locale, they are going to be tagged as “doing business” in a state. Taxes are assessed when a company sells directly from a state or upholds many contracts in a state.

If your business fits any of these criteria, you could benefit from filing a Foreign Qualification with us.

A Certificate of Authority is an official document that gives you permission to operate your business in a state other than the one in which your corporation was formed. If a company neglects to file a Foreign Qualification and receive a Certificate of Authority, then it does not have legal standing or authority to transact business within that state. Every state has different rules regarding what constitutes transacting business. Not following the rules could affect your business's Certificate of Good Standing which you need to get a business loan, renew your business license, or file your business taxes. It can be cumbersome and time-consuming to file a Certificate of Authority in every state where you want to do business, which is why Bizee has simplified the process. Complete our online Foreign Qualification form, and we’ll do the paperwork for you.

Every process has paperwork and proper steps to follow. To give you an understanding of what we’ll be doing on your behalf, let’s review the process below:

• Name Search: Your corporation’s name will be compared to the database in each state to ensure no other company is using it. Hopefully, there will be no contradiction, but if there is then you’ll be asked to operate under a fictitious or assumed name. If you'd like to conduct your own name search for your LLC, we've created How to Search & Choose Your Business Entity Name in all 50 States.

• Registered Agent: You will need to select a registered agent in that state.

• Certificate of Authority: Finally, you register for the right to do business in the state. This is similar to the process of incorporation and requires some paperwork and fees to be submitted.

You must submit a registration in a state at least 20 days before conducting any business. This allows time for paperwork to be completed and the Certificate to be issued by state authorities.

Many states require a copy of your formation documents and a Certificate of Good Standing from your home (domestic) state where you incorporated. You’ll also be asked to pay fees required by each state you are seeking the right to conduct business. Keep in mind that once you “do business” in a state, you become responsible for meeting their requirements, such as the need to file annual information reports with the state.

The cost depends on the fee to obtain a Certificate of Good Standing and the filing fee that the inbound state assesses. Our service fee to prepare and file a Foreign Qualification is $149. To review the fee in your state click on the “order now” button and select the state and entity type.

The filing time is dependent on the governing state agency and varies by state. Multiple steps are involved in filing, so your timely response to needed documentation is helpful. Most of the states will expedite the filing for an additional fee.

This document is obtained by contacting the Secretary of State. Bizee will complete this request when you file with our service. It is provided to verify that you are in compliance with tax and government requirements in that state.

The governing state agency will typically return a copy of the filed articles which are then mailed to you immediately.