Registering a Foreign Corporation

Jul 14, 2011
Sarah Kolb

Some rights reserved. - Marxchivist

If you'd like to expand your small business into another state, you probably need to register as a foreign corporation to stay compliant with the new state.

If you have a corporation in one state, but you'd like to expand your business into another state to take advantage of new marketing opportunities and increase your revenue, you must first file a foreign corporation. While "doing business" is loosely defined by the various Secretaries of State (if even defined at all), a good rule of thumb is that if you have employees or offices in that other state, you're likely considered doing business there.

Can I choose any name for my foreign corporation that I want to register in the new state?

Ultimately, yes -- but let's look closer at the restrictions a new foreign corporation could face.

If the legal corporate name is available for use, the foreign corporation must register in the new state using the same legal name.

Of course, a foreign corporation, once registered, can operate in the new state in the same way that any domestic corporation could, which includes the ability to file a DBA. Many foreign corporations with locative words in their business name, such as Minnesota Wildlife Adventures, might choose to operate under a DBA more befitting of the new location: North Dakota Wildlife Adventures, for instance.

If the legal corporate name is already in use by an incorporated entity in the new state, the foreign corporation will need to register using another name.

The details vary by state -- some allow the required second name to be registered right on the foreign corporation formation document itself, while others require a separate DBA filing to be submitted simultaneously -- but in all states, a new foreign corporation must abide by the same name availability rules as any domestic entity.

What will I need to register my foreign corporation?

In order to register in your new state, you'll go through a process much like you went through to form your domestic corporation -- you'll file your formation document with the Secretary of State's office.

While each state has its own version of the formation document (and in many cases, its own specific terminology to refer to that document -- it's called a Statement and Designation in one state, Foreign Qualification in another, Foreign Corporation Qualification Form in yet another), and the information that will be contained on that document is just as varied, typical foreign corporation formation paperwork will include some of the following information:

Your legal corporate name in your original state
The corporate name under which you will do business in the new state, if your legal corporate name is unavailable
Your original state of jurisdiction
Your filing date and filing number in your original state
Your registered agent in your original state
Your new registered agent, who is required to have a physical address
Corporate officers' names and addresses
Number of shares of stock authorized; par value information
Signature of a corporate officer

In addition to the foreign corporation registration information, a majority of states require a Certificate of Good Standing to be submitted along with the formation documents. This certificate is proof from your original state that you have complied with all of the corporate requirements, including any taxes and annual report filings. (Some states require a certified copy of the Articles of Incorporation, along with any filed amendments, in lieu of the Certificate of Good Standing.)

Where should I go to file my foreign corporation?

Depending on your confidence level, budget, and availability, there are a number of avenues through which you can file your foreign corporation formation paperwork.

Secretary of State's office

This is perfect for a person that has the time to go over the paperwork in detail (any mistakes will cause the application to be rejected, which depending on your state can be a matter of days or months) and has already determined that they are required to register their business as a foreign corporation. You will mail or deliver the formation documents, along with the state filing fee, to the Business Division, Corporations Bureau, or similar department of the Secretary of State.

Corporate attorney

This is a great solution for someone who thinks they may need to register as a foreign corporation but isn't sure, and isn't comfortable with paperwork. For a relatively high fee (legal fees are generally relatively high), corporate attorney can help you sort through not only your filing requirements but also any subsequent license or permit requirements that may be necessary for your type of business in your state, county, or town/city.

Third-party filing service

A third-party filing service is a perfect solution for a business owner that has already determined that he or she must file as a foreign corporation, but simply doesn't have the time or inclination to track down the registration requirements on their own. While you don't have the benefit of legal advice or assistance with compliance, presumably you've already run your legal decisions by a lawyer or legal advisor before contacting the filing service. Additionally, while the service will not proactively give you direct legal advice, many have relationship with vendors that specialize in things like business license compliance that you can access, typically at some savings off of the vendors' standard prices.