A Foreign Qualification also known as a Certificate of Authority is the process of registering an LLC or corporation to do business in a state outside the state of incorporation. A corporation or LLC is only recognized in its state of incorporation a Foreign Qualification must be completed in each state that a corporation or LLC intend to conduct business. If a company neglects to file the Foreign Qualification it does not have legal standing or authority to transact business within that state. Every state has diferent rules regarding what constitutes transacting business.
Typical criteria include but are not limited to:
- Does the company has a physical presence in the state.
- Does the entity have employees working within the state.
- Does the company conduct banking within state.
Requirements to obtain or a Foreign Qualification / Certificate of Authority:
- Must file appropriate state document and pay the corresponding state fee.
- Must obtain a Certificate of Good Standing from state of origin to verify status of business formation.