Foreign Qualification To Do Business in Nevada

Doing business in multiple states

If your company plans to transact business in Nevada as well as the home state of incorporation, you may need to register your business in Nevada. This process is called foreign qualification.

There are many factors used to determine whether a company is transacting business in a state, and the criteria differ by state. Some criteria evaluated include:

• Whether the company has a physical presence in the state
• Whether the company has employees in the state
• Whether the company accepts orders in the state
• Whether the company has a bank account in the state

If you are uncertain whether your particular business needs to foreign qualify, or register to transact business in Nevada, it’s best to seek the advice of an attorney or accountant.

Why foreign qualification is important

Foreign Qualifying your company to do business in states where you transact business is not optional. It is a legal requirement. Failure to qualify when you’ve been transacting business could result in:

• Fines and penalties for the time you were transacting business but were not qualified.
• Liability for back taxes for the time you were transacting business but were not qualified.
• Loss of access to that state’s court system, meaning that if you were sued in that state, you would not be able to defend the suit.

How do you foreign qualify your company?

Companies are considered “domestic” only in their state of incorporation; elsewhere they are a “foreign” entity. Domestication or foreign qualification is the process of filing the appropriate paperwork to register a foreign entity or company to conduct business in another state. To foreign qualify your business, you may need to:

• Register for a Certificate of Authority in the state(s) where you want to do business.
• Apply for a Certificate of Good Standing from your state of incorporation, showing that your company is in existence and has met all state requirements.
• Pay applicable state filing fees when you submit the Certificate of Authority filing.
• File annual reports, pay taxes and annual report fees in the state(s) where your company has undergone foreign qualification.

Key benefits

When foreign qualifying a business, there is interaction both with your state of incorporation and the intended state(s) of qualification. Resident Agents of Nevada, Inc handles the interaction with the State of Nevada on your behalf, allowing you to dedicate your time to your business.

Some things to keep in mind

Companies are required to have a resident agent not only in the state of incorporation but also in any/all states of foreign qualification.

Nevada particulars

Enjoy these benefits all Nevada companies do:

• No corporate or personal income tax Because there is no income tax in Nevada, there is no state income tax return to file every year.
• Nevada requires a business license fee of $200, unless an exemption is filed.
• One person corporation One person can be the President, Secretary, and all the officers and directors of a corporation. (While the same is true of LLCs, legal risks may arise with a single Member LLC as LLCs were designed with partnership structure in mind.)
• Limitation of liability The officers and directors of a Nevada corporation are protected by statute and case law from the debts and actions of the corporation.
• Information privacy Nevada does not share taxpayer information with the Internal Revenue Service (IRS).
• Shareholder privacy Shareholder information is never on the public record in Nevada.
• Complete anonymity Annual reports require the name of only one person and report only the assets located in Nevada. With a Nevada corporation you really can anonymously own your corporation.
• Unlimited shares You can issue unlimited shares, with or without par value through your Nevada corporation.
• Low regulation Nevada does not have the bureaucratic regulations of many states and takes pains to keep it that way.
• Minimal fees There are no “hidden fees” for registering officers or changing your address at the time of renewal.

Got questions?

Email us agents@nevada.org or call toll free today (877) 463-8462