Are you conducting business in more than one state? Chances are that you may need to qualify your business outside of the state where you originally formed your corporation or limited-liability company.
What does it mean to “qualify”? When you incorporate your business, the state in which you incorporate with the Secretary of State’s office is known as the domestic state. If you decide to register your business in another state besides the domestic state, this is known as “qualifying” in a foreign state. An example would be that you incorporate a business in Delaware. You then decide to register your business in Pennsylvania and New Jersey. In Pennsylvania and New Jersey, your business would be known as a foreign business, because it wasn’t incorporated in those states.
If you are deciding whether your business should register in additional states besides your domestic state, here are some items to consider:
- Corporations and LLCs usually register as foreign businesses if they have a physical presence, such as an office, warehouse, or employees, in other states.
- Consult with legal counsel before deciding to register in additional states. This can be beneficial in determining whether it’s a good idea for your business to expand to other states.
- Requirements for registration vary by state. Some incorporation or registered agent service companies can assist in determining the documents and fees required for the states in which you do business.
- Do your research on separate business licenses, permits, and tax registrations that may apply when you register in a new state. Some service companies provide compliance services to help you determine which licenses, permits, and taxes apply to your business.
The Company Corporation® has helped thousands of business owners incorporate and keep their businesses in compliance. If you’re interested in incorporating, registering your business in another state, or learning more about compliance services, visit The Small Business Authority’s “Incorporate Your Business” page.
The Company Corporation® furnished this article as part of a series that appears every Friday on Thesba.com. The Company Corporation® is a service company and does not provide legal or financial advice. For more information, visit Incorporate.com.