Lesson 14 of 15
Formation vs foreign qualification
Formation creates the company in one state. Foreign qualification is permission to operate in a second state.
What usually triggers registration
Definitions vary by state, but the common triggers look similar.
- An office, warehouse or store in the state
- Employees based there
- Regular in-person services performed there
- Holding real property there
- In some states, holding a state licence to operate
What registration involves
Typically a certificate of good standing from your formation state, an application for authority, a registered agent in the new state, a fee, and from then on that state's annual reports and taxes.
The cost of skipping it
States commonly impose back fees and penalties, and may block your company from bringing a lawsuit in their courts until you register. That last one bites when you need to enforce a contract.
Two states means two agents, two annual reports and two sets of fees. Factor that in before forming out of state.
Prefer to have someone handle the filing?
You can file directly with the state using the steps above. If you would rather have Gullia Filing prepare and file your formation documents, run the name check and act as your registered agent, we handle the process end to end.