Domestic and Foreign Qualifications

A domestic corporation or LLC is a company formed in the state it is operating in. Meaning if you form your corporation or LLC in Delaware - you will be considered a domestic entity in Delaware. A foreign corporation or LLC is a legal business entity that has qualified to do business in a state other than where it was initially incorporated. In order to become a foreign entity a business must first qualify.  

If a business would like to expand and do business in a state other than where they formed, a Foreign Qualification, or Certificate of Authority, can be filed with the state. Once this document is filed the business may be permitted as a foreign entity in the applicable states. Without the proper foreign qualification, you could lose access to that state's judicial system or even be hit with fines, back taxes and penalties. 

Corporations and LLCs are subject to taxes and annual report fees in both the state of formation and any states where they are qualified to do business as a foreign entity. Most states also require corporations and LLCs to have a registered agent in each state where the company is qualified.

Need a Foreign Qualification (Certificate of Authority)?

We prepare and file qualifications for a foreign corporation or LLC, plus we provide registered agent services in all 50 states. Visit us online: www.ailcorp.com 

Find the answers to all of your major incorporation questions in our new eBook