How to Register as a Foreign Corporation in Your Home State

Companies that do business in a state other than the one in which they are incorporated are considered foreign corporations in the second state and must register accordingly. Follow these steps.

Difficulty: Moderate

Instructions

Things You'll Need:

• Filing fee
• Computer with Internet access

Understand the Process of Qualifying as a Foreign Corporation

1. Obtain an application from your state's department of commerce. The application will be called something like, "Application for Authority to Conduct Affairs." Often, you can download this from your state's official Web site.

2. Go to the secretary of state in the state where you are incorporated, and get a Certificate of Good Standing.

3. File your application and fee with your state's department of commerce. Know that nonprofit corporations may qualify for reduced filing fees.

4. Visit the Business.gov Web site (see Resources, below) to find more information on corporate procedures.

Prepare Yourself for the Tax Consequences

5. Know that, since you are choosing to take advantage of all the rights and amenities of the state in which you are operating as a foreign corporation, you will be obligated to contribute to the health and wealth of that state. This may mean filing taxes and paying other fees within that state.

6. Contact an attorney who helps corporations register in foreign states to ensure that you are strictly adhering to the registration procedure.

Tips & Warnings

• Plan to spend several hours gathering and filling out the paperwork necessary to qualify as a foreign corporation. If you want to do business in many states, you will need to fill out separate forms for each one. Many people delegate this work to a corporate attorney.
• If you are not registered in a state, you may not have the right to sue, which can limit your ability to collect debts and pursue your rights as a business.
• If the state in which you do business requires out-of-state companies to register as foreign corporations and you neglect to do so, you may have to pay weighty penalties.
• If you are doing business in your home state and you have not qualified as a foreign corporation in that state, you may be unable to pursue legal rights until you qualify. By that time, the statute of limitations may have run out.
• Don't be daunted by the foreign filing process. As with becoming incorporated, it's simply a matter of correctly filling out the appropriate forms and paying the filing fees.

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