Maryland Foreign Qualification
In order for any business to operate within Maryland, it’s important that they take the time to foreign qualify in order to remain compliant with all local, state, and federal regulations. Foreign qualification involves several steps that you must take, and learning more about it is important.
What is Foreign Qualification?
Foreign qualification is nothing more than the act of registering a business so that it may operate legally in a state outside of the one it was formed in and exists in. If you want your business to have any kind of physical presence in Maryland, you’ll have to take the steps to foreign qualify.
Why Does A Company Need Foreign Qualification?
Why You Need To Do It – You must foreign qualify in order to stay compliant and legally operate in any capacity within a state outside your own home state. This includes any kind of physical presence, from stores to offices to just having some representatives working within the state.
When Should You Do It? – As soon as you finalize your plans to operate a business in Maryland, it’s time to start the process of foreign qualification. Starting early ensures that you don’t end up facing delays related to your business opening in a new state. Generally, you will need to receive Maryland foreign qualification if your company falls under any of the following criteria:
- Has a physical presence in Maryland
- Buying a property there
- Have remote employees
- Accepts orders in Maryland
- Owns a bank account in Maryland
What Happens If Your Entity Does Not Foreign Qualify?
Failure to qualify will actually bring forth criminal charges in Maryland. You’ll face a fine of as much as $1000 fined directly to each member and agent of a foreign LLC if you’re not properly registered. Corporations can face fines of up to $200 for failure to register before operating in the state. Additionally, the business will be unable to bring a lawsuit into the state court system. You may also face additional tax related penalties.
Steps To Obtain Foreign Qualification
There are a few basic steps that you must follow in order to obtain Maryland foreign qualification for your business. These include the following.
1. Obtain Certificates – Before starting with the application process, you should obtain a Certificate of Good Standing from the home state of your business. Then, you can file either a Foreign Limited Liability Company Registration or a Foreign Corporation Qualification form. These forms are available from the Maryland Department of Assessments and Taxation website for free.
2. Collect And Submit Information – You’ll provide essentially the same information that you used to form your business.
- The full legal name of the LLC registered in the home state
- LLC name you will use in Maryland if the original name is unavailable or does not follow state regulations
- Name of the home state
- The original date of formation
- The principal office street address
- The nature of business of your LLC in Maryland
- Name and address of resident agent for service of process in Maryland
- An authorized signature
- Corporation name as stated in the Certificate of Good Standing
- Name of the home state
- The current address of the foreign corporation
- Name and address of the resident agent for service of process in Maryland
- Address of principal office of the corporation in maryland (optional)
- An authorized signature
3. Appoint Registered Agent – Your registered agent is responsible for handling all of the paperwork and management of your foreign qualification. Most businesses turn to third party providers like DoMyLLC and allow them to handle the registration process for them to streamline their daily activities.
4. File The Application – Once you have the appropriate information filled out on the form, the next step is to file it with the Maryland Department of Assessments and Taxation. You’ll also have to include the filing fee of $100 for both corporations and LLCs – and if you’ve already done businesses the state without registering, there will also be an additional $200 penalty.
5. Ongoing Maintenance – Maryland requires that any business file an annual report each year by April 15 of each year. This process is essentially updating your registered agent information and letting the state know the business is still operating. The filing fee is $300.
What Is the Difference Between Foreign Qualification And Incorporating?
Incorporation is a process that creates an entirely new business entity. Foreign qualification won’t create a new company. Instead, it only modifies an existing LLC or corporation’s ability to do business in a different state.
How DoMyLLC Can Assist With Streamlining The Process
We make Maryland foreign qualification easy by taking care of the entire process for you. We offer:
- Dedicated account managers
- Ongoing and unlimited customer support
- Name availability check
- Full filing and registration service.
We do everything so you don’t have to, giving you more time to focus on other aspects of your daily routine. Contact us today to get the help you deserve.
Maryland Foreign Qualification FAQs
You must obtain a Certificate of Good Standing from your company’s state of formation along with a Foreign Limited Liability Company Registration form or Foreign Corporation Qualification form.
The basic fee is $100 for both corporations and LLCs. But if you’ve done business in Maryland prior to filing the form you’ll also have to pay a $200 penalty.
Any business that wishes to operate in any capacity within the state of Maryland will need to file for foreign qualification.
No. An attorney isn’t needed, but you may wish to consult with legal representation in order to ensure that you have the protection you need.
All basic information about your business. This includes things like:
- Business name
- Business address
- Names of members or managers
- Date of formation
- Mailing address
- Registered agent information
If your name isn’t available, you’ll have to file under a fictitious name. This will have no impact on your name in other locations.
Maryland Business Resources
Maryland Office of Secretary of State
Maryland Secretary of State
301 West Preston Street, 8th Floor / Room 801
Baltimore, MD 21201