Introduction to a foreign business

What is a Foreign Business?

A ‘foreign business’ is a business entity that has been formed outside the state it is planning to register in. If you have already formed a business entity in California or Colorado and are thinking of registering your business entity in Nevada then it will be known as a foreign entity. Any business that has been formed in another country, state or jurisdiction will have to go through the process of foreign qualification to operate in Nevada. The process to register a foreign business is different for that of a domestic business.

What is a Foreign Qualification for a Business?

Foreign qualification is the process by which you can register your existing business with the office of secretary of state in Nevada or any other state. It enables a foreign business to legally pursue their business activities and opportunities across state borders. The process also ensures you are able to pursue business operations without the need to form or incorporate a new business entity in the desired state. This process is considered as the first step towards business expansion in a new state or in multiple states.

• If you are planning to expand your existing business in any other state other than the state of business formation
• If you are planning to offer services, sell products, or bid for a contract in any other state other than the state of formation
• If you have to apply for a professional business license in another state other than the state of formation
• If you are looking for a physical address for your business in any other state

Foreign LLC

If you have an established LLC in any state and want to operate from Nevada as well then your business will have to go through the process of foreign qualification. There are various aspects of foreign qualification and operating a business in Nevada that you will need to consider. Let us first understand what a foreign LLC in Nevada is and how you can form one.

What is a foreign LLC?

A limited liability company (LLC) that has been formed in a specific state or outside of Nevada and is planning to operate in another state or Nevada is considered to be a foreign LLC. This simply means that each state treats a foreign limited liability company as a business entity that was not registered in that state. The important thing to understand is that you don’t have to form a foreign LLC or a new business to make your existing business operational; all that is required is to qualify.

How to form a foreign LLC?

The formation of a foreign LLC in a specific state other than its original jurisdiction of registration will follow the LLC Act of the new state. How it works is that if you were to form a foreign LLC in Nevada then the formation or qualification process will be governed by the 2019 Nevada Revised Statutes, Chapter 86 of the Limited-Liability Companies Act § 86.543 -§ 86.549. It is important to understand that the process for registering a foreign limited liability company will be different for each state. The following steps will help you determine the entire process.

• Primary State Registration: Have you registered your LLC in the primary state? You can apply for foreign qualification in another state only after you have formed a business in your chosen or primary state. For example: If you want to start operations as a foreign LLC in Nevada but are based in California then you need to first form your business in California.
• Apply with the Secretary of State: In order to form a foreign LLC, you will have to apply to the office of the Secretary of State for the chosen state. Each state will have its own set of requirements. For example: If you want to form a foreign LLC in Nevada, you will be required to submit an application for registration as a foreign limited-liability company and it should be signed by a member or manager of the said LLC.
• Information to be provided: Different states have different information requirements pertaining to the incorporation of a foreign business entity. For example: if you are planning to form a foreign corporation in Nevada then you will be required to provide the following information:
  • The name of your foreign limited-liability company
  • The date and jurisdiction of foreign LLC formation
  • Declaration of the existence of your foreign limited-liability company
  • Office address required to be maintained in Nevada
  • Name and business address of each member or manager
• Certificate of registration: Once you have submitted your application then it will be considered that your LLC is foreign qualified. If your registration conforms to foreign LLC laws and the requisite fees have been paid then the Secretary of State after reviewing your application will issue a Certificate of registration also known as Certificate of Authority in many states. Once you receive this certificate your business will be qualified to transact in the said state.

Need more information on forming your foreign LLC?

Foreign Corporation

If you already have a business corporation established in any state but would want to expand to other states and operate there then such a business will have to go through the process of foreign qualification. There are several aspects of this process that you need to consider. Let us first understand what a foreign corporation is and how you can form one.

What is a foreign Corporation?

A foreign corporation is a business entity that conducts its business activity or operations in a jurisdiction or state other than where it was initially incorporated. If you were to incorporate your business in Texas and then plan to operate or expand it into the Nevada market then such a business will be considered as a foreign business and will have to undergo foreign qualification.

• If you are planning to open branches in other states or want to expand your market to other states. One of the best examples is retail chains or supermarkets
• If you are planning to purchase a commercial property, a building or a warehouse in a state different from that of your incorporation state.
• If you are planning to offer services, sell products, or simply bid for a contract in another state then you will have to form a foreign corporation in that state

How to form a foreign corporation?

The incorporation or registration process of a foreign corporation in a specific state other than its original jurisdiction of registration will follow the laws of the new state. For example: If you were to form a foreign corporation in Nevada then the formation or qualification process will be governed by the 2019 Nevada Revised Statutes, Chapter 80 – Foreign Corporations, § 80.0045 – § 80.280. It is important to understand that the process for registering a foreign business or private corporation will be different for each state. The following steps will help you determine the entire process.

• Primary State Registration: Have you registered your business corporation in the primary state? You can apply for a foreign qualification in another state only after you have incorporated your business in the chosen jurisdiction or primary state. For example: If you want to start operations as a foreign corporation in Nevada but are based in Texas then you will need to first incorporate your business in Texas.
• Apply with the Secretary of State: In order to form a foreign corporation, you will have to apply with the office of the Secretary of State for the chosen state. Each state will have its own set of requirements. For example: If you want to form a foreign corporation in Nevada, you will be required to submit an application for Qualification to do business in Nevada also known as Certificate of authorization to transact business pursuant to NV Rev Stat § 80.120 (2019).
• Information to be provided: Different states have different information requirements pertaining to the incorporation of a foreign business entity. For example: if you are planning to form a foreign corporation in Nevada then you will be required to provide the following information:
  • The corporate name of your foreign corporation as it appears in the documentation issued by incorporation state or jurisdiction
  • The date of incorporation and jurisdiction of foreign corporation
  • Name and address of registered agent in the new state or Nevada
  • Initial list of officers as it is mandatory for filing Qualification to do Business in the new state of incorporation.
  • The filing fee unlike in an LLC will be based on the number of shares authorized
• Qualification to do business in the said state: Once you have submitted your application, it will be considered that your corporation is foreign qualified. If your registration conforms to foreign corporation law of the said state and the requisite fees according to authorized shares have been paid then the Secretary of State will review the application. Your foreign qualification will be complete once you receive a file stamped copy of the Qualification to do Business or a Certificate of Authority issued by the secretary of state.

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Are you ready to form your foreign business?

Different types of business entities have different requirements governed by the laws of the chosen state and this is true for a foreign business as well. Irrespective of the state, every foreign entity has to apply for and undergo foreign qualification in order to operate in the new state or jurisdiction. If you are thinking of forming a foreign business corporation or limited-liability company then IncParadise can help you with the entire process.