Foreign Qualification

If your existing business entity is formed in one state and doing business in another state or states, you will likely have to register your entity as a foreign entity in the other states.

This differs from transferring or domesticating a business entity to another state. With this foreign qualification option, the actual legal existence of the business entity remains in its home state and it acquires a secondary legal existence in the other state or states. The legal existence in the home state is not abandoned or terminated.

Here are the primary reasons why you may have to or want to register your business as a foreign business entity in another state:

1. To be able to conduct business in the state: A business entity may need to register in a state in order to conduct business there. Most U.S. states have a statute or law that requires business entities to register in their state if they want to sell goods or services in the state. State law often provides the state attorney general the power to force businesses to register if they fail to do so voluntarily when the state law requires it.
2. To access legal protections: Registering an existing business entity in another state can provide the owners with certain legal protections in that other state, such as limited liability protection. This can be particularly important if the entity is engaging in activities that carry a high level of risk in the other state.
3. To establish a presence in the other state: Registering a business entity in another state can help a business entity establish a presence in the other state, which can be important for building credibility with customers, partners, and other stakeholders. For example, having a local entity can give a local banker confidence in their ability to lend money to your business.
4. To take advantage of state-specific incentives: Some states offer specific incentives, such as tax credits or breaks or grants, to businesses that register and operate within their borders. A business entity may choose to register in a state in order to take advantage of these incentives.
5. To facilitate the process of raising capital: Depending on the type of business and its goals, an existing business entity may need to raise capital in order to fund its operations. Registering in another state can make it easier to access capital from investors located in that state. This is largely due to state and Federal investment laws that provide an exemption for in-state investors.

Regardless of your motivations, we can help your existing business entity in another state, we can help.