What is Foreign Qualification?
Foreign qualification is the process that allows a Corporation or LLC located in one state to operate in a different one. If a corporation or LLC is planning on opening a location or doing business in Arizona, it will have to complete the Arizona foreign qualification process in order to do so legally.
Why Does A Company Need Foreign Qualification?
Why You Need To Do It – A corporation or LLC will need to foreign qualify in order to be fully compliant and legally operate a business in Arizona.
When Should You Do It? – As soon as it decides to branch out into Arizona. Postponing the process can slow down the time it takes to finalize, thus slowing down the journey to operating your business there. Generally, you will need Arizona foreign qualification if your company falls under any of the following criteria:
- Has a physical presence in Arizona
- Buying a property there
- Have remote employees
- Accepts orders in Arizona
- Owns a bank account in Arizona
What Happens If Your Entity Does Not Foreign Qualify?
If you fail to register, the business can face significant legal and financial repercussions. An LLC or corporation won’t be able to bring a lawsuit in the court system and the attorney general could bring forth actions to stop you from operating. It may face back taxes as well as fines and penalties for failing to foreign qualify.
Steps To Obtain Foreign Qualification
Arizona requires that you take several key steps in order to foreign qualify. If you want to expand your business into the state, here are the basics of what you’ll have to do.
1. Obtain Certificates – You’ll have to obtain a Certificate of Good Standing from your home state to start the process. For LLCs, you must also file a Foreign Registration Statement with the Corporations Division of the Arizona Corporation Commission. For Corporations, the state requires the filing of an Application for Authority to Transact Business in Arizona with the above mentioned office. You can either submit it in person or by mail.
2. Collect And Submit Information – Arizona requires that you provide several facts about your business.
- LLC name registered in your company’s home state
- LLC name you will use in Arizona
- Name of your company’s home state
- Entity type, either an LLC or a Professional LLC
- The original date of formation
- The purpose and general character of business
- Principal office address
- The business address in Arizona
- Management structure
- Attachment listing member or managers
- The type of corporation
- Corporation name in your company’s home state
- The legal name you will use in Arizona
- Home state
- The original date of incorporation
- Business your corporation is engaged in
- Limitations of your corporation in the home state, if applicable
- Description of the character of business that you intend to conduct in Arizona
- Principal office address
- The business address in Arizona
- Name of contact person for foreign corporation and address (who is registering the name)
- Signature of the authorized person
3. Appoint Registered Agent – Every foreign LLC and foreign Corporation must have a registered agent. In Arizona this is referred to as the Statutory Agent, and they must have a physical address in the state. They receive legal documents from the state and deliver them to the business in a timely manner. To simplify things, most businesses turn to a third party organization such as DoMyLLC, and allows them to handle the foreign qualification and serve as their registered agent.
4. File The Application – Filing the application is done online or by mail, and you must submit it along with a cover sheet, a statutory agent acceptance form, a certificate of good standing from your home state, and a structure of management if the business is an LLC. In addition to this, you must submit the filing fee of $150 for an LLC and $175 for a Corporation.
5. Ongoing Maintenance – Unlike many other states, Arizona has no ongoing annual or biennial reporting requirements.
What is the Difference Between Foreign Qualification and Incorporating?
With Arizona foreign qualification, your business is essentially remaining the same in terms of structure, but registering to do business a different state. The process is basically an LLC or corporation informing the state that it is doing business there. Incorporation forms an entirely new business entity.
How DoMyLLC Can Assist With Streamlining The Process
Running a business involves a lot of different things. Instead of putting more stress on your shoulders, letting our team ensure that you are legally allowed to operate in Arizona is a better option. We offer:
- Dedicated account managers
- A name availability check
- Full registration for your foreign qualification
- Unlimited customer support
We make foreign qualification easy so you can focus on the other aspects of running your business.
Arizona Foreign Qualification FAQs
You must submit the registration application along with a cover sheet, a management structure statement (for an LLC), an acceptance form for the statutory agent, and a certificate of good standing from your business’ home state.
Arizona charges a flat filing fee of $150 for an LLC and $175 for a Corporation.
Any corporation or LLC that is located outside of Arizona that plans on operating in the state.
An attorney is not required, but consulting with one is a good idea to ensure you are fully compliant. Third party organizations can also help alleviate any legal stress you may feel related to the process.
All basic business information including:
- Name of business
- Business owner names
- Business address
- Purpose and primary focus of business
- Statutory agent name and address
If your name is taken, you must choose a fictitious name and operate in Arizona under that name instead.
Arizona Business Resources
Arizona Office of Secretary of State
Arizona Corporation Commission
1300 West Washington Street
Phoenix, AZ 85007-2929