Delaware Foreign Qualification
If your business is located outside Delaware, you will need to take steps to legally operate inside the state. Foreign qualification is needed to allow your company to branch out and complete any kind of business in Delaware. It’s a straightforward process, but can take time to complete.
What is Foreign Qualification?
Foreign qualification is the process of registering your business to operate in Delaware if it is currently located in a different state. In this case, foreign doesn’t refer to an entity outside the country – it instead refers to businesses located outside the state in question.
Why Does A Company Need Foreign Qualification?
Why You Need To Do It – Foreign qualification is required to do business of any kind in Delaware if your business exists in another state.
When Should You Do It? – The sooner, the better. Waiting to register could cause delays or issues when your LLC or Corporation is ready to start doing business. As such, beginning the process as soon as you know you will be branching out into Delaware is important. Generally, you will need Delaware foreign qualification if your company falls under any of the following criteria:
- Has a physical presence in Delaware
- Buying a property there
- Have remote employees
- Accepts orders in Delaware
- Owns a bank account in Delaware
What Happens If Your Entity Does Not Foreign Qualify?
Failure to foreign qualify means that your business is not compliant. This means that you may face significant penalties, fees, and fines. You may also face back taxes and penalties associated with them. Additionally, you will be unable to bring legal action to the Delaware courts until you are foreign qualified.
Steps To Obtain Foreign Qualification
There are a few steps that businesses will have to take in order to receive Delaware foreign qualification. These include the following.
1. Obtain Certificates – In Delaware, LLCs should complete and file the Certificate of Registration of a Foreign Limited Liability Company. Corporations will need a Foreign Corporation Certificate. You can download copies of the forms from the Secretary of State website. You will also need to obtain a Certificate of Existence or Certificate of Good Standing from the state your LLC or corporation currently exists.
2. Collect And Submit Information – The certificate application will request basic business information about your company.
LLC
- LLC name registered in your company’s home state
- LLC name you want to register in Delaware
- Name of your company’s home state
- The original date of formation
- The purpose of your LLC in Delaware
- Registered agent information
- Date when the LLC first did or intends to do business in Delaware
- An authorized signature
Corporation
- Corporation name registered in your company’s home state
- Corporation name you wish to use in Delaware
- Address of your registered office
- Nature and purpose of your business
- The assets and liabilities of the corporation
- Signature of the authorized person
3. Appoint Registered Agent – Businesses must appoint a registered agent who will be responsible for receiving documents and correspondence related to your foreign qualification and to your business operations throughout the year. They receive various legal documents from the state and pass them on to the business as needed. Most businesses elect to use a third party entity like DoMyLLC to serve as their registered agent.
4. File The Application – Upon completion of the application, you will need to file it with the Delaware Division of Corporations along with the $200 filing fee for LLCs. Corporations will pay a $245 filing fee.
5. Ongoing Maintenance – Any corporation operating in Delaware must file an annual report on or before June 30 of each year along with a $125 filling fee. LLCs don’t have to file an annual report, but must pay annual taxes in the amount of $300 by June 1st of each year.
What Is the Difference Between Foreign Qualification And Incorporating?
With incorporation, an entirely new business entity is created. Foreign qualification doesn’t create a new business and instead it simply allows you to operate your existing business in another state – Delaware, in this case.
How DoMyLLC Can Assist With Streamlining The Process
Delaware foreign qualification can take time out of your busy schedule and add stress to your daily routine. We take care of it for you so you can focus on other issues. Our team handles everything and offers:
- A dedicated account manager
- Unlimited and ongoing customer support
- Name availability check
- Full filing and registration
If you’re moving into Delaware, we’re here to help. Contact us today and let our team handle the hard work for you.
Delaware Foreign Qualification FAQs
You will need to submit a Certificate of Existence from the state your LLC was formed along with the Certificate of Registration of a Foreign Limited Liability Company in order to foreign qualify. If a corporation is registering, the Certificate of Existence and Certificate of Registration of a Foreign Corporation in Delaware needs to be filed.
Delaware charges a basic filing fee of $200 when you submit your application as an LLC and $245 for corporations.
Any business that operates in a different state that wishes to branch out into Delaware will be able to – and be required to – file for foreign qualification.
An attorney is not required to complete the process, but speaking to your legal counsel is always a good idea to ensure that you stay protected fully.
Delaware requires that you provide information about your business including:
- Name
- Owner and officer names
- Business address
- Date of formation
- Name of registered agent
If your existing name isn’t available you will have to choose a fictitious name to operate under in Delaware. This won’t impact the name you operate under in your home state.
Delaware Business Resources:
Delaware Office of Secretary of State
Phone Number:
(302) 739-3073
Address:
Delaware Secretary of State
PO Box 898
Dover, DE 19903