Doing Business in Other States
Registering as a Foreign Corporation
In the context of U.S. businesses, a “foreign corporation” usually refers to a corporation (or LLC) doing business in a state where it was not incorporated. Rather than setting up a new corporation in every state where business will be conducted, a corporation can register as a foreign corporation in other states.
Business owners may choose to register their business entity in states that don’t have state income tax or states that have corporate-friendly regulations. Some popular U.S. states for these purposes include Delaware, Nevada and Texas. It’s a common practice for businesses to incorporate in a business-friendly state and then conduct business in other states as a foreign corporation. Businesses can select any state to incorporate or form an LLC as long as that state’s formation requirements are met. States do not require the business owners to be residents of the state to form a corporation.
Many states allow corporations to file online as a foreign corporation. Even if online service is not offered, a simple form can be mailed to the secretary of state along with the registration fee. A foreign corporation must designate a registered agent for service of process. A registered agent is an individual or an authorized business that can receive service of legal documents on behalf of the corporation. When a registered agent is served with legal papers, that means the corporation itself was served.