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Do You Need to Register as a Foreign Corporation in Another State?

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By Christopher Coble, Esq. on March 10, 2015 12:16 PM

Your business is doing great, and you're planning on expanding into another state. Congratulations!

However, did you register as a "foreign corporation" yet? Do you need to? Here are four things that owners of growing businesses should know about being a "foreign corporation":

1. What Is a Foreign Corporation?

A foreign corporation doesn't necessarily mean a corporation from another country. Corporations registered in one state would be considered a "foreign corporation" in another state.

2. Do You Need to Register as a Foreign Corporation?

Most states have statutes requiring foreign corporations transacting business in the state to register in that state. For example, if Corporation A is incorporated in Delaware but has a headquarters building in New York, Corporation A would be considered a "foreign corporation" and must register in New York.

3. What Is 'Transacting Business'?

The key word to focus on is "transacting business." Only corporations actually transacting business in the second state must register as a foreign corporation. But what exactly does transacting business mean?

Some general questions to consider when trying to figure out if your corporation is "transacting business" in another state are:

  • Do you have a physical store or office in another state?
  • Are you conducting business in-person, such as meeting with clients, in another state?
  • Do you have employees working in another state?
  • Does a significant portion of your clients come from another state?

If you answered yes to any of these questions, you are likely transacting business in another state, and will need to register as a foreign corporation.

4. How to Register as a Foreign Corporation?

Each state will have its own form required to register as a foreign corporation. For example, in California, it is called the "Statement and Designation by Foreign Corporation." In Nevada, the form is entitled "Qualification to do Business in Nevada."

The forms generally require the name and address of the corporation, the state the corporation is incorporated in, the name and address of an in-state registered agent, and a filing fee. Other requirements can vary from state to state.

If you need help registering your business as a foreign corporation, an experienced business attorney may be able to help. If you would like to do it yourself, FindLaw's Legal Forms can help guide you through the process.

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