What Is Foreign Qualification?

In order to operate legally outside the state of incorporation, a corporation or limited liability company (LLC) is required to obtain foreign qualification. It serves as a notice to a state that a corporation that was not formed in that state is conducting business within its borders.

Additionally, foreign qualification provides the same liability protections that are afforded to corporations and LLCs in their home state. Failing to file for foreign qualification will expose officers and shareholders to personal liability.

The foreign qualification process, available online at MaxFilings, involves a few steps. First, a name availability search must be conducted to help ensure a company by the same or deceptively similar name does not exist.

Next, a registered agent must be appointed to serve as an in-state liaison to your out-of-state business. Also, registration of a certificate of authority is required, which is similar to filing articles of incorporation. Each state has different requirements for what are to be included, but in general, the certificate of authority must include:

• Company name, date, and state of incorporation
• Legal address of the business
• Name and address of registered agent in the state of qualification
• Names and addresses of corporate officers/LLC members
• Number of authorized shares and listing of different stock classifications
• Management type (LLC only)
• Signature of a corporate officer or LLC member