When do I need to register as a foreign corporation?
You need to register as a foreign corporation once you plan to “do business” in a state. Routine business actions such as opening a company bank account, opening an office, recording revenue and hiring employees are among the criteria that states use in determining that you are doing business in their state. Each state has different standards for determining when you have sufficient presence in the state.
It is worth noting that without foreign qualification in a given state jurisdiction, your business is not protected by the judicial system. This means you would not be permitted to file or respond to lawsuits until and unless you qualify, and you may face past due fees and penalties for not having filed for foreign qualification sooner in this event. Because Gust, together with our third-party service providers, are committed to helping you ensure that your new business is legally compliant with certain government regulations typically applicable to startup businesses (something that is absolutely necessary if you hope to receive any outside investment), Gust Launch enables you to file for foreign qualification immediately after your incorporation in Delaware.
Please also note that your business will take on additional responsibilities and taxes in each state in which it registers as a foreign corporation.
Last updated on December 13, 2017