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What is the U.S. Foreign Company Registration?

What is the U.S. Foreign Company Registration?

Foreign entity registration is confusing for many people at first. This article will introduce you to U.S. foreign company ang its registration.

A corporation (or other type of corporate entity, such as a limited liability company or LLC) conducting business in one state when incorporated in another is considered a foreign corporation and must qualify as a foreign corporation to legally do business in that state. For example, a business incorporated in Delaware that wants to do business in California would be considered a foreign corporation in California, and as a result, the Delaware corporation must register as a foreign corporation to do business in California.

For tax purposes, the Internal Revenue Service (IRS) treats all domestic companies in the same manner for tax purposes, without regard to where they were originally formed or organized within the Unites States.

The state in which you chose to form your business is known as your home or domestic state. If you are interested in conducting business in other states and want to have the same types of protection as your home state, then you must register in that specific state to do so. That is where foreign entity registration comes into the picture and it is the way you will ensure that you are legally set up to work in the new state, although your company will still be considered foreign by nature.

There are many steps involved when registering as a foreign entity and it can vary depending on the state you are working with; however, many of them are similar and will follow the general procedure. The first part of the process to ensure that your business qualifies is to conduct a name availability search in that state. During this process, you will ensure that the name of your business is not currently being used in that state by another company. If you do find that the name of your company or the name that you were wanting to use is not available, then you will be required to use an assumed or a fictitious name in that state in order to continue with the process.

Many states also require a "Certificate of Good Standing"(or "Certificate of Existence" depending on the state) from your home state to be filed by the foreign corporation along with the application. This Certificate is used as evidence that the foreign corporation exists and is authorized to conduct business in that foreign state.

To register a foreign entity, you will need to appoint a registered agent and have an address within the state. Then you can fill out the foreign entity application, submit all needed documents and pay fees to the government to complete the registration. Overall, the process is very similar to that of filing articles of incorporation. If you are interested in foreign company registration, please contact with Kaizen professional consultants.


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