There may come a time when a business owner decides that it’s time to expand. While opening up new offices or outlets in the same state is quite simple there are extra steps needed in order to open your business in outside states. The same name and identification can be used; however, businesses must be granted an out-of-state status called foreign qualification. Foreign, in this case, doesn’t mean a business from another country; it’s just a designation that a business was started in a different state. A foreign qualification does come along with some requirements.
Domestic Compliance Required
The first step is to confirm that your company is in good standing in your state of operation. If you are not in compliance within your state, your foreign qualification will be rejected. Confirm that your taxes and fees are paid, licenses and permits are still valid, and all other regulations have been met. Once you have ensured compliance, you can begin filing your foreign qualification. Some states require a copy Certificate of Good Standing to do business.
Your business name may not be available in other states. Before registering, you will need to check your name availability. This can be done by doing an entity search on the state’s Secretary of State website. If your name is available, you can begin filing. If your name is taken, the state usually requires the company to adopt an assumed name to use in that state.
Every state has specific documents required to file for foreign qualification. However, the documents required may differ from state to state. These may include your Certificate of Registration, Certificate of Good Standing, or Tax Registrations. Careful research is required to determine what may be needed for any particular state.
Get A Registered Agent
A registered agent is a resident of the state that is assigned to receive all important documents on behalf of the business. All states require businesses to appoint a registered agent. Once appointed, you will list the registered agent on the required paperwork to register for foreign qualification.
Pay The Fees
This administrative process takes time and money, so fees will have to be paid to submit, review, and approve your application. If everything is in order and fees have been paid, you’ll receive a certificate of authority and be able to start running your out-of-state business.
The most important part of filing a foreign qualification is understanding the state requirements.