If you decide to do business in another state, your business must register with that state. Additionally, if the company expands into other states, the corporation must have a registered agent in each state where it is doing business.
Registered agent for service of process
While every state has different business laws, each state requires a company doing business in its state to have a registered agent for the service of lawsuits and subpoenas.
It's often difficult to find an agent to appoint in each state if the corporation is doing business in multiple states. If that's the case, it's a good idea to have a company that's available in all states be your registered agent.
Different registered agent solutions are available, but having an online company with the authority to act anywhere in the United States can be very helpful. This allows your company to have a registered agent in place in every state where the company does business.
Expanding your business into another state
Only some transactions in other states mean that your company is doing business in those states. Nevertheless, your company must keep track of what business the company is doing in other states.
A company registered and doing business in the same state is known as a domestic corporation. In contrast, a company doing business outside the state where it's registered is known as a foreign corporation (in this usage, foreign does not refer to another country).
Many types of company actions constitute doing business in another state. Some of these actions include, but are not limited to:
- Having a physical office in another state
- Conducting sales in another state
- Administering services in another state, even without a physical office in that state
- Being incorporated in Delaware but having a physical office in Illinois, making the company qualify as doing business and qualifying as a foreign corporation in Illinois
- Having a strong connection to another state, other than making advertising or telephone sales
- Having a substantial portion of the corporation's income come from another state
- Often meeting clients in another state
These situations usually mean that the company is doing business in another state, although it depends on the foreign state's definition of doing business. Suppose your company is doing business in another state. In that case, you need to file forms with the secretary of state or another government official to permit your company to do business in that state. When you're ready to file the required paperwork and pay the fee, establish a registered agent for that state.
Failure to appoint a registered agent in another state
Suppose you fail to appoint a registered agent in the additional state where your company is doing business. In that case, the company usually incurs fines, fees, and ongoing penalties, and the company cannot litigate in court. If you can't find a person who lives in the state to act as your registered agent, consider hiring a reputable company to act as your registered agent as soon as possible.
What happens if you have more than one business or have a business in more than one state needing registered agent?
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