Foreign Qualification

Register your business to operate in another state.

Before conducting operations across state lines, a business may be required to file for a foreign qualification or obtain authority to do business in that state. If your company expects to transact business outside the state in which your company was formed, you may be required to file for a foreign qualification.

What are the benefits of filing foreign qualification with MyCorporation?

Expand your Business

Filing a foreign qualification allows your business to legally operate in another state, outside of the one they initially formed a formation with, giving you access to more customers.

Avoid fines and penalties

Conducting business without filing a foreign qualification could mean you could be charged fines and fees and be held liable for back taxes.

Open a Bank Account in Another State

Most banks will require that your business is registered with the Secretary of State in order to all you to open up a bank account.

Work with an experienced team

For more than 20 years, we've been guiding customers every step of the way with their foreign qualification paperwork.

What is a Foreign Qualification?

A foreign qualification, sometimes called a certificate of registration, is the process of registering a corporation in another state as a foreign entity. Foreign qualifying a company means that you are registering to conduct business in a state other than the state where you originally formed your businesses. This allows you to do business in this state in addition to your home state, and sets up the structure needed to pay applicable state fees and taxes.

What are the steps to foreign qualifying a business?

When you register to conduct business in another state, there are a few important steps you will want to follow. First, you want to apply for a certificate of good standing from the state of incorporation. Basically, this is verification from the state that your business has met its tax and business filing obligations. Next, you need to file your foreign qualification documents with the state where you would like to do business.

When does my business need to file a foreign qualification?

If you are unsure about whether you should file a foreign qualification for your business, ask yourself these questions to decide:

  1. Does your business have a physical address or presence in the state?
  2. Does your business conduct business in the state?
  3. Are you paying employees in another state?
  4. Does your company hold any assets in the state?
  5. Have you opened a business bank account in another state?

If you answered yes to any of these questions, chances are a foreign qualification is right for you. However, we are unable to provide legal advice so it's advised that you consult with an attorney who understands the details of your business and can help you make the decision.

What is a good example of a situation where a foreign qualification is required?

If your company incorporated in the state of Nevada, but has an office and employees in California (so it's essentially based in California), then you would generally have to file for foreign qualification within the state of California. In other words - you must apply for authority to conduct business in California.

As Seen On:

As seen on Forbes, The Huffington Post, Fox Business and CBS

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Frequently asked questions

Laws and fees governing corporations can vary from state to state. While you are able to form a corporation in any state you choose, most of our customers choose to form their corporation in the state in which they are conducting business. This is typically the most simple and cost effective way to operate your business for the following reasons:

  1. Any state that you do business in may require you to file a "Foreign Qualification" if you are not incorporated there, costing additional fees and paperwork. (e.g. If you form a corporation in California, but wish to do business in Arizona, Arizona may require that you Foreign Qualify).
  2. If you form a corporation in one state and do business in another, you could subject your business to taxation in both states. Many states will tax a corporation that exists in their state, even if it is not doing business there.

There are certain circumstances that could make it beneficial to incorporate in a state other than your home state. If you intend to do business in several different states or if your home state has complex laws or high tax rates and filing fees, you may want to consider forming your business in another state. Delaware and Nevada are commonly recognized as states that are attractive to businesses.
Delaware is recognized as having modern and flexible corporate laws, a business friendly government, and a customer service oriented staff that can process documents and requests more quickly than other states.
Nevada does not charge a state corporate income tax or a personal income tax, and allows for a higher level of privacy for a business and its owner's personal information.

As stated by the Delaware Office of the Secretary of State, Delaware General Corporation Law is one of the most advanced and flexible corporation statutes in the nation. In addition, Delaware courts have over 200 years of legal precedent as makers of corporation law. Further, the state legislature seriously regards its role in keeping the corporation statute and other business laws current. Finally, the office of the Secretary of State operates much like a business rather than a government bureaucracy with its modern imaging system and customer-service oriented staff.

Delaware law requires every corporation to have and maintain a registered agent in the State of Delaware. We can provide you with Registered Agent Services should you desire to incorporate in Delaware.

The Division of Corporations in Delaware offers a variety of incorporation services including "2-hour", "Same Da"" and "24-hour" processing and filing of documents.

Franchise tax - All corporations incorporated in the State of Delaware are required to file an Annual Franchise Tax Report, and to pay a franchise tax. Taxes and annual reports are to be received no later than March 1 each year. The minimum tax is $30 with a maximum of $150,000.

Authorized Shares Method:

  1. Less than 3,000 shares (minimum tax) $30.00
  2. 3,001 - 5,000 shares $50.00
  3. 5,001 - 10,000 shares $90.00
  4. each additional 10,000 shares or portion thereof $50.00

Delaware Corporation Annual Report - Annual reports are sent to the registered agents in December of each year. A $20.00 filing fee is required for the annual report. Annual reports or reprints may be requested through your registered agent.

The Nevada Incorporation Advantage

  1. No Nevada State Corporate Income Tax
  2. No Nevada Taxes on Corporate Shares
  3. No Nevada Franchise Tax
  4. No Nevada Personal Income Tax
  5. No I.R.S. Information Sharing Agreement
  6. Nominal Annual Fees
  7. Minimal Nevada Reporting and Disclosure Requirements
  8. Stockholders are not Public Record
  9. Stockholders, directors and officers need not live or hold meetings in Nevada, or even be U.S. Citizens
  10. Directors need not be Stockholders
  11. Officers and directors of a Nevada corporation can be protected from personal liability for lawful acts of the corporation
  12. Nevada corporations may purchase, hold, sell or transfer shares of its own stock
  13. Nevada corporations may issue stock for capital, services, personal property, or real estate, including leases and options. The directors may determine the value of any of these transactions, and their decision is final.