Register to Do Business in Another State
When you form an LLC or corporation, where you form the company will be known as its home state (aka: a domestic company). But when you begin to do business in another state, the business will need to register to do business in that state. This process is known as foreign qualification. Out-of-state businesses, formally called foreign businesses, must file a form commonly called a Certificate of Authority. The Certificate of Authority will be similar to the company’s formation documents (Articles of Organization or Articles of Incorporation). Once your corporation or LLC has registered to do business in a new state, your business will also be required to fulfill each state’s maintenance requirements, meaning you’ll be responsible for annual reports and taxes due in each state where your company is registered to do business.
Foreign Qualification How To
To register to do business in a new state, you’ll need to obtain and complete the following:
- Obtain a Registered Agent in the New State
In each state where your corporation or LLC operates, you need to obtain a registered agent that is physically located in that state. If you have storefronts in each state, then you may be able to have an employee be designated as your registered agent. However, if your business doesn’t have a storefront or physical location in each state where your company is registered to do business, you will need the help of a registered agent service. You can hire many different registered agents, but it typically makes the most sense to hire a national registered agent service provider like IncFast, so that all your documents are received and stored in one location. This reduces paperwork and all annual report reminders come from the same registered agent.
- Complete the Certificate of Authority
The Certificate of Authority is very similar to a company’s formation documents. You’ll need to list the primary and mailing addresses, registered agent name and address, the names and addresses of members/directors (most likely), as well as a certificate of good standing. A certificate of good standing is a document your obtain from your home state (the state where you originally formed the company) that certifies that your company was registered and is currently active in your home state. In addition to completing the Certificate of Authority and obtaining the certificate of good standing, you will also need to pay a filing fee typically ranging from $50 to $500, depending on which state you’re registering to do business in.
- File Any Taxes or Annual Reports Due
Once you have completed your Certificate of Authority, your business will also be responsible for adhering to any maintenance requirements set forth in the state where your company has registered to do business. That means any annual reports or franchise taxes due to the state where you’re registered are your responsibility. Registered agent services help mitigate of the required tracking of paperwork.
Do Online Businesses Need to Register to Do Business in Each State?
No, simply selling and shipping to customers out of state does not typically require a business to register to do business in that state. Only once a business begins to have an actual “physical” presence in a new state do they need to register.
State Foreign Qualification Requirements
Each state has its own requirements for foreign businesses registering to do business. Below, you’ll find the what form you need to file and how much it costs to register to do business in each state. (To learn more about annual maintenance requirements in each state, see our Annual Reports page.)