Foreign Entity
Definition: A business formed in one state that registers to do business in another state.
A foreign entity is a company registered in a state other than the one where it was formed. A Wyoming LLC that opens an office in Colorado must register in Colorado as a foreign LLC. In the Colorado search it appears with its home jurisdiction listed.
When registration is required
States generally require foreign registration when a company is "transacting business" there, which typically means having an office, employees, or ongoing operations. Isolated sales or interstate commerce alone often do not count. Each state defines this in its own statute.
- Foreign registrations need a registered agent in the new state.
- The new state usually asks for a good standing certificate from the home state.
- The entity then files the new state's annual report too.
California is strict about this and its Franchise Tax Board can impose the $800 annual tax on foreign LLCs doing business there; see the California guide. The opposite term is domestic entity.
Related: Massachusetts business search, annual report.
Foreign Entity questions
When does a company need to register as foreign?
When it transacts business in a state other than its home state, which usually means having an office, employees or ongoing operations there. Each state defines the threshold in its own law.
What happens if a company does not register as foreign?
It can be fined and may be barred from suing in that state's courts until it registers.
Sources
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