Filing Foreign Registration Certificates

April 13, 2006

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Besides filing an articles of organization, the formation of a limited liability company (LLC) or corporation requires completion of a number of tasks.

Before an LLC or a corporation can do business on a regular basis in another state (a state other than the one in which it was formed), the entity must file a foreign registration certificate with the other state and pay a required fee. The foreign registration fee may be the same as, or more than, the fee the state charges to form an entity of that type in the state.

A failure to register as a foreign entity usually does not invalidate the entity or the entity's contracts in that state. However, in a few states, the entity or its contracts may be deemed invalid. And, there are frequently other consequences, such as civil penalties or being unable to institute legal proceedings. Distinguishing states in this respect shouldn't be necessary, as the issue can be avoided simply by registering the entity as a foreign entity in every other state in which it will be doing business.

Typically, an entity needn't register in another state if it will be conducting only a few isolated transactions in the state.