Foreign qualification in Pennsylvania

There are many times when entrepreneurs operating their startups in a specific state will feel the need to expand their business to other states. Does this mean that they have to register their company all over again in the new state? Current business laws make this expansion possible without the need to re-register businesses in each state. This process is known as a foreign qualification in Pennsylvania. We’ve created this guide to provide relevant information concerning the various processes for a Pennsylvania foreign business registration, including state laws, foreign qualification requirements, processes, fees, and an understanding of how doing business in the state of Pennsylvania is defined.

Pennsylvania Foreign Qualification

Whether you’re planning a Pennsylvania LLC foreign registration or a foreign incorporation, it’s always essential to identify the various advantages offered by the state. The state of Pennsylvania has always attracted small and medium-sized enterprises primarily due to its excellent geographic location and strong transportation infrastructure. The state is also home to a growing STEM workforce that includes engineers, software specialists, statisticians, mathematicians, physical scientists, and life and social scientists. This not only helps to improve the overall business climate but also plays a key role in industry innovation. The process for a Pennsylvania foreign business registration also ensures that you or your company has access to state business incentives and tax credit programs that offer several long-term benefits.

What is a Pennsylvania foreign qualification?

The terminology, foreign qualification in Pennsylvania can sound overwhelming and you may think that this refers to the registration of international companies; however that is not the case. When it comes to Pennsylvania state laws like the Pennsylvania Consolidated & Unconsolidated Statutes and the governing authorities, foreign qualification simply refers to the operations of a company in a state or jurisdiction that is different from the entity’s state of formation. This applies to different entity structures such as limited liability companies (LLCs), corporations, limited liability partnerships (LLPs), and limited partnerships (LPs). The process and requirements may vary from one state to another and you’ll also need to conduct a Pennsylvania foreign entity search before registering in the foreign state. Let’s look at an example to understand this:

Example: You have formed a domestic corporation in Massachusetts by filing the Articles of Organization. Here, Massachusetts is considered to be your home state or state of incorporation. Now, if you want to expand your business to Pennsylvania, there are two options. One is to close your existing business and incorporate a new company in Pennsylvania. The second option is a Pennsylvania foreign corporation registration or foreign qualification.” This process will provide you with the authority to transact business in Pennsylvania without the need to close your company in Massachusetts.

Doing business in Pennsylvania?

Generally speaking, corporations, limited liability companies, and any other business entities can’t just transact business in any state that they want to, other than their initial state of registration. All business entities require permission from the state that they want to transact business in that is outside of their home state. Hence, Pennsylvania foreign business registration becomes necessary. Permission to do business in Pennsylvania is governed by the process of a foreign qualification. Each state in the USA has separate laws for defining business transactions, making it important to understand the concept of doing business in this particular state.

The Pennsylvania Consolidated & Unconsolidated Statutes provide an insight into the various activities of a foreign entity that do not constitute doing business in Pennsylvania. According to 15 PA Cons Stat § 403 (2020), not doing business includes:

Mediating, maintaining, arbitrating, defending, or settling a proceeding or an action
Carrying out any activity related to the entity’s internal affairs like holding meetings
Maintaining business bank accounts in financial institutions in Pennsylvania
Selling products or services through independent contractors in this state
Maintaining an office or agency for the exchange, transfer, and registration of securities
Acquiring or creating indebtedness or security interests in Pennsylvania property
Transacting business in foreign or interstate commerce
Conducting an isolated transaction

Pennsylvania Foreign Qualification Process

If you have an existing business like a corporation or an LLC in any other state and want to expand to the state of Pennsylvania, then it will be considered a foreign entity in this state. In this case, you’ll be required to apply for a foreign qualification in Pennsylvania and the process is governed by the Pennsylvania Consolidated & Unconsolidated Statutes. According to Chapter 4 – Foreign Associations, each entity based in any other state but wanting to conduct business in Pennsylvania will need to apply for proper authority to do business. There can be serious consequences for transacting business without the state-mandated authority which may include severe penalties. Let’s look at the process of a Pennsylvania foreign business registration for LLCs and corporations.

Pennsylvania Foreign Corporation Registration

If you’re already operating a corporation in another state and want to expand your operations to Pennsylvania then you’ll need to apply for a foreign qualification. This involves applying for a Pennsylvania foreign corporation registration to get the necessary authority to transact business in this state. Let’s understand in detail what this process requires.

What is a Pennsylvania Foreign Corporation?

A Pennsylvania foreign corporation is an entity that’s registered in any state other than Pennsylvania and is interested in transacting business in this state.

Example: If you have incorporated in South Dakota and operate your business in the said state but after a few years want to expand your business to Pennsylvania, then it will be considered a foreign corporation in the latter state.

There are certain steps that you would need to follow including the Pennsylvania foreign entity search and registration. Let’s look at the steps involved in applying for a Pennsylvania foreign qualification.

How to register a foreign Corporation in Pennsylvania?

The process of a foreign qualification involves registering a corporation in the state of Pennsylvania, although the process and fees will be different from the registration of a domestic company. The process of a Pennsylvania foreign corporation registration involves various steps including:

Corporation Name – The first step towards a Pennsylvania foreign corporation registration is identifying and registering a business name. The corporate name should comply with state laws and should contain words like “corporation,” “incorporated,” or abbreviations like “Inc.,” “corp.,” and “co.” Once you’ve identified a name, it’s important to conduct a Pennsylvania foreign entity search also known as a name availability search. If the chosen name is unavailable or doesn’t comply with Pennsylvania laws then you will need to file a DBA.
Registered Agent – Whether you’re forming a domestic entity or applying for a Pennsylvania foreign corporation registration, there are certain state guidelines you’re required to follow. One mandatory law is to continuously maintain a registered agent in the state. IncParadise is one of the top Pennsylvania registered agents that has helped several domestic and foreign entities incorporate in this state.
Foreign Registration Statement – The most important step to apply for a Pennsylvania foreign business registration is to get the necessary authorization to transact business in the state. You’ll need to file the Foreign Registration Statement pursuant to the provisions of 15 Pa.C.S. § 412. This application must be submitted to the Pennsylvania Department of State, Bureau of Corporations and Charitable Organizations along with a fee of $250. You’ll also be required to submit a Docketing Statement along with the Foreign Registration Statement. The docketing statement includes information concerning the foreign entity like the Employer Identification Number, the Description of Business Activity, and the name of the entity. You also have the option to apply for expedited service by paying an additional fee that depends on the service selected. In some cases, the fee for same-day delivery is $100
Advertisement – Once you apply for a Pennsylvania foreign corporation registration it’s important to officially publish a notice or advertisement stating your intention to register or conduct business in this state, pursuant to 15 PA Cons Stat § 4124 (2020).

Do you want to register a foreign Corporation in Pennsylvania?

Pennsylvania Foreign LLC Registration

If you’re already operating a limited liability company in another state and want to expand your business to the state of Pennsylvania, then you have to undergo the process of a foreign qualification. This process is also known as Pennsylvania LLC foreign registration and will help you transact business in the state without the need to register a new or domestic LLC. 2020 Pennsylvania Consolidated & Unconsolidated Statutes, Title 15 – Corporations and Unincorporated Associations, Chapter 4 – Foreign Associations.

What is a Pennsylvania Foreign LLC?

A Pennsylvania foreign limited liability company is an LLC that’s registered in any state other than Pennsylvania, that also wants to conduct business in this state, while remaining operational in their home state. The home state is the state of the LLC formation and initial registration.

Example: You have registered your LLC in Louisiana and are operating there. Now, you want to expand your business in other states like Pennsylvania. In such a scenario, your Louisiana limited-liability company will be considered a foreign LLC and Pennsylvania foreign business registration will become necessary.

There are certain steps involved for the process of a Pennsylvania LLC foreign registration. Let’s take a closer look at these important steps.

How to register a Foreign LLC in Pennsylvania?

If you’re already operating a limited liability company in another state and you want to expand your business to the state of Pennsylvania, then you’ll need to obtain authority from the state to conduct your business. This process is known as a Pennsylvania LLC foreign registration and there are several other aspects to this process that you need to consider. The various aspects involved in a Pennsylvania foreign qualification include:

LLC Name – One of the foremost requirements of a foreign qualification is identifying a business name. You have to select a name in compliance with the state’s naming guidelines. You’ll also need to conduct a Pennsylvania foreign entity search to verify the LLC name availability. Ideally, an LLC name should contain words like “limited liability Company” and “limited company” or abbreviations like L.L.C or LLC. If the chosen LLC name is not available or doesn’t comply with Pennsylvania naming guidelines then you may be required to file a DBA.
Registered Agent – One of the important aspects of any new business formation including Pennsylvania foreign business registration, is the service of process executed by a registered agent. A foreign limited liability company in Pennsylvania will need to continuously maintain a registered agent in the state. Pennsylvania registered agent services offered by IncParadise will not only help fulfill state requirements like service of process, but can also assist with other annual compliances like filing annual reports.
Foreign Registration Statement – A foreign limited liability company that wishes to transact business in this state will need to go through the process of a foreign qualification. A Pennsylvania LLC foreign registration requires you to file the Foreign Registration Statement pursuant to the provisions of 15 Pa.C.S. § 412. This form has to be submitted to the Pennsylvania Department of State, Bureau of Corporations and Charitable Organizations along with a filing fee of $250. It’s important to note that every foreign LLC registered in this state also has to submit a Docketing Statement along with the Registration Statement.

Want to form a foreign LLC in Pennsylvania?

Need Any Assistance in Applying for Pennsylvania Foreign Qualification?

Pennsylvania is a favorable state for entrepreneurs because it offers a good business climate, a skilled workforce, a strong transportation infrastructure, and a wide variety of business incentives. If you’re planning to expand or move your existing business to the state through the process of a foreign qualification in Pennsylvania, then you can take advantage of the numerous state benefits. As one of the leading registered agents in Pennsylvania, IncParadise can assist you with the process of a foreign LLC registration or incorporation.

We provide several other business-related additional services in Pennsylvania that will help fulfill the annual compliances required for your company like filing annual reports or getting an EIN tax ID. We also provide foreign qualification services in all 50 states.