A Foreign Qualification is the process of registering your business in a state other than the state it was originally formed in or incorporated. 

A Foreign entity is an entity that is conducting business in a state where it was not originally formed in. A Domestic entity is an entity that is doing business in the state that it was formed or incorporated in.

You would need to foreign qualify if you are looking to conduct business in another state. Various other reasons to foreign qualify in another state would be the following:

• You have a physical presence in another state such as leased office property or owned property
• Significant amount of sales or revenue from another state
• Hiring new employees who are residents of the state
• Selling to state government and municipalities of another state
• Have a bank account in another state

Undergoing a Foreign Qualification allows you to maintain your existing business structure and records while achieving compliant status for the new state you are looking to conduct business in. Forming a new business in another state is feasible but would create a new standalone domestic entity with a new set of business records and tax filings. The advantage of foreign qualification is that it would avoid unnecessary costs and administrative complications.

If your business meets the necessary conditions for foreign qualification, then significant consequences could easily arrive such as the following:

• Loss of legal protection and rights. You may be denied access to the state's court system preventing you from bring on or defending against a lawsuit.
• Financial penalties. The state can impose severe financial penalties including additional charges plus interest (sometimes accruing daily)
• Barred from banking. You might be able to lose access to opening a new bank accounts or securing new loans or mortgages in that state.
• Inability to operate legally. You may be disqualified from obtaining licenses in the state

A Certificate of Authority is a certificate issued by the Secretary of State stating that your business is allowed to operate in another state outside of the state of your formation or incorporation. You will obtain the Certificate of Authority after allowing us to file the Foreign Qualification on your behalf in another state. Once the filing is complete, we will send you a copy of the certificate for your records.

Our fee for Foreign Qualification is very competitive at $149 plus any state fees. State fees vary by state and will be disclosed upfront so that you are always aware of the total costs.