A corporation can do business in states other than the one it is registered in. However, most states have laws that say that if a corporation has substantial business contacts with the state it
wants to do business in, it must register as a foreign corporation (meaning from another state) doing business there.
A typical state law reads, “A foreign corporation may not transact business in this state until it obtains a certificate of authority from the secretary of state.” The concept of “transacting business’ involves regular, repeated, and continuing business contacts within the state. In a further attempt to clarify what “transacting business” really means, many state laws suggest that the following types of conduct do not qualify as transacting business:
– Maintaining, settling, or defending legal proceedings
– Holding meetings of the board of directors or shareholders
– Selling through independent contractors
– Creating or acquiring indebtedness, mortgages, or security interests
– Securing, enforcing, or collecting debts
– Conducting isolated transactions completed within 30 days
If you are doing substantial business in another state of a nature you think might qualify as “transacting business,” then you should check with the Corporate Filing Office to obtain an application for authority. The process usually involves filing the application with the Corporate Filing Office, appointing a registered agent, and paying the filing fee. Failure to file as a foreign corporation can subject your corporation to penalties.