Your corporation, non-profit corporation, llc or other entity may need to file as a foreign corporation in a state other than the one in which the business was initially formed if certain criteria are met. Whether a foreign corporation filing is right for your business in a state (other than the original state of incorporation) in which you are now or will be conducting business, is something that only you and /or your legal advisor must determine.
Activities That DON’T Constitute Transacting Business in a State
And
DON’T Require Foreign Corporation Filing
All states have statutes that set forth business activities that do not constitute doing business in the particular state, and thus don’t require a foreign corporation filing.
Below is a general list of activities do not constitute doing business in most states (please check a specific state for any specific language):
- Maintaining, defending or settling any proceeding;
- Holding meetings of the board of directors or stockholders or carrying on other activities concerning internal corporate affairs;
- Maintaining accounts in banks or credit unions;
- Maintaining offices or agencies for the transfer, exchange and registration of the entity’s own securities or maintaining trustees or depositaries with respect to those securities;
- Making sales through independent contractors;
- Soliciting or receiving orders outside of the state through or in response to letters, circulars, catalogs or other forms of advertising, accepting those orders outside of the state and filling them by shipping goods into the state;
- Creating or acquiring indebtedness, mortgages and security interests in real or personal property;
- Securing or collecting debts or enforcing mortgages and security interests in property securing the debts;
- Owning, without more, real or personal property;
- Isolated transactions completed within a certain amount of days (30-120 in most states) and not a part of a series of similar transactions;
- Transacting business in interstate commerce.
Activities That DO Constitute Transacting Business in a State
And
DO Require Foreign Corporation Filing
Many states don’t set forth what constitutes transacting business to a degree that would require a foreign corporation filing.
Some activities that may constitute transacting business, include maintaining an office in a particular state for the purpose of transacting business and engaging in business activities that require licensing by a state agency (e.g. mortgage broker, real estate agent, dentist, etc.).
If you need to know whether your company’s activities in a particular state require a foreign corporation filing, you should consult with an attorney.
Click here to start a foreign corporation filing