At a certain point in its lifecycle, expanding a corporation into other states may be necessary for continued growth. If you’ve thought about becoming a foreign corporation doing business in Florida, however, you should be aware of how the state treats out-of-state corporations.
Florida requires out-of-state businesses to register in Florida before they can engage in any business transactions. Accordingly, knowing how and whether you have to register as a foreign corporation is important.
“Foreign corporations required to register in Florida include both companies that are expanding into the state and new companies headquartered in Florida but formed under the laws of Delaware or a different state.”Florida Business Attorney Trevor Brewer
What Is a Foreign Corporation in Florida?
State law views business entities as either foreign or domestic. A domestic entity is one formed and operated within the same state. By contrast, a foreign corporation is one formed in a different state.
Florida law requires corporations to apply for qualification as a foreign business before “transacting business” within the state. As a result, a corporation formed outside of Florida wanting to do business in Florida must separately register in Florida as a foreign corporation. However, certain activities do not count as transacting business, including:
- Defending or settling a legal proceeding;
- Carrying on internal affairs, like shareholder meetings; and
- Conducting limited, one-off transactions that conclude within 30 days.
Failing to register subjects foreign corporations to back taxes and civil penalties. Because the nature of “transacting business” is vague, it is in a foreign corporation’s best interests to register if it does any regular business within Florida’s borders.
Qualifying a Foreign Corporation Doing Business in Florida
A foreign corporation can qualify to do business in Florida by registering with the Florida Division of Corporations.
1. Obtain a Certificate of Existence from Your Home State
As part of the application process, foreign corporations must provide an original certificate of existence. This certificate, also called a certificate of good standing, is an official document that shows the proper formation of your corporation and the legal authorization to do business.
To qualify as a foreign corporation in Florida, you must provide an authenticated original certificate of existence, not a photocopy. Therefore, it is necessary to obtain an official certificate from the Secretary of State for the state where you formed your corporation. Finally, note that the certificate must issue within 90 days of the date you file your application.
2. Register an Agent in Florida
Foreign corporations must have a registered agent based in Florida. Additionally, the registered agent must have a street address and not a P.O. Box. However, foreign corporations are unlikely to have a physical presence in the state before they register. As a result, foreign corporations often use a registered agent service.
3. Complete the Foreign Qualification Application
The Florida Division of Corporations offers separate applications for profit and non-profit corporations. Some of the information the application requires includes the:
- Name, date of incorporation, and address of the foreign corporation;
- Federal Employer Identification Number (FEI or EIN); and
- Personal information for the corporation’s directors.
State laws also require corporations to include “Company, “Inc.,” “Co.” or similar in the name of the corporation. Thus, when it comes to the name of the corporation, make sure you include the proper entity designation.
4. Submit the Application and Required Fees
Submit the completed application, including the cover letter, certificate of existence, and fee via mail to the Florida Division of Corporations at the following address:
Division of Corporations
P.O. Box 6327
Tallahassee, FL 32314
In addition to the $70 registration fee for each application, applicants may choose to pay $8.75 each for a certificate of status and a certified copy of the application. Checks should be made out to the Florida Department of State.
5. Make Sure to File Annual Reports After Qualifying
A foreign corporation doing business in Florida must file a yearly annual report between January 1 and May 1, starting the year after registration. Foreign corporations may file annual reports online with the Florida Division of Corporations using the document number issued after successfully registering as a foreign corporation.
The fee for filing the annual report is $150, with a $400 late fee for filing after May 1. Because Florida may cancel the foreign registration entirely if you want too long, it’s a good idea to always make sure you file the report before May 1.
Contact a Florida Business Law Attorney
If you have a foreign corporation doing business in Florida or if you’re looking to expand your business, BrewerLong can help you with your foreign qualification. Our practice focuses on helping small businesses in Florida with a variety of business law issues from formation to risk management. Contact us today online or give us a call at 407-660-2964 to set up a consultation.