Florida Foreign Qualification
The state of Florida is home to approximately 2.5 million small businesses including domestic and foreign entities and their contribution to the state GDP is 44 percent. In fact, Florida is home to several foreign businesses and startups which have multi-state operations.
For Example: WalMart has headquarters in Bentonville, Arkansas and has 385 retail outlets in Florida. Similarly, Hewlett-Packard Latin America and Hilton International are based out of Miami, Florida even though HP is originally registered in Palo Alto, California while Hilton International is registered in McLean, Virginia.
If you are a small business owner in another state like New York or Nebraska and want to expand your business to Florida then you have to undergo the foreign qualification in Florida process. This process can be used for Florida foreign corporation registration or foreign LLC formation under the Florida statutes. The process of Florida foreign qualification can be different for different business structures.
What is Florida foreign qualification?
Foreign qualification Florida is a process by which you can register your existing business with the state authority like the office of the secretary of state or the Division of Corporations of another state. Foreign qualification will enable your company to legally establish its operations in another state and pursue growth and expansion opportunities in the said state without having to incorporate a new entity.
The process of foreign qualifying would require you to obtain a certificate of existence or a certificate of good standing from your home state. This is a necessary step prior to applying for Florida foreign LLC registration or incorporation. The process of registering a foreign LLC or corporation in Florida may be different from that of other states in terms of filing process and regulations. Let’s look at an example to understand this:
If you have formed a domestic corporation in Delaware then such a state will be known as your home state. Now, if you plan to expand your operations or open a branch office or retail outlet in Florida then you will have to apply for Florida foreign corporation registration as governed by FL Stat § 607.1501 (2019). This process will ensure your business is a legal entity in the state and can apply for licenses and permits to operate.
As a part of the foreign qualification in Florida process, you will also be required to hire and maintain a Florida registered agent like IncParadise in the state. You will also have to fulfill annual compliances as required by the state of Delaware (home state) as well as Florida (new state).
Doing business in Florida
One of the important questions that every business owner or entrepreneur should ask with respect to foreign qualification Florida is the definition of “doing business” according to the state they want to form their business in. Since each state has its own standards or there are no uniform standards, it is always important to check with the state of foreign qualification. Generally speaking, a business having physical presence in a specific state is known to be doing business in that state. Participating in activities related to interstate commerce is also considered as conducting business in the said state.
According to the FL Stat § 605.0905 (2013) for Florida foreign LLC registration and FL Stat § 607.1501 (2019) for foreign corporations, the following activities do not constitute transacting business in the state. It is as follows:
- Maintaining, settling, mediating, or defending any proceedings in the state
- Holding meetings of the managers, board of directors, members, or shareholders
- Maintaining bank accounts
- Maintaining managers or agencies for the exchange, transfer, and registration of securities of the foreign LLC or corporation
- Selling through various independent contractors
- Obtaining or soliciting orders through mail, agents, or employees
- Creating or acquiring mortgages, indebtedness, and security interests in personal or real property
- Transacting business in interstate commerce
- Making an isolated transaction that is completed within a period of 30 days
- Owning and controlling a subsidiary LLC formed in or corporation incorporated in this state