When do I need a California foreign corporation?

If you’re a small business owner somewhere near the West coast and business is booming, you might decide to expand your business to take advantage of other markets, possibly across state lines, and California is a great place to grow and expand a small business. But before you sign the lease to your new corporate offices and throw wide your doors, bear in mind the filing requirement that is the difference between a happy and successful relationship with the state and a swift penalty for failing to comply as a welcome to the neighborhood: registering your California Foreign Corporation. sports medicine expert witness in walnut creek california

A California Foreign Corporation is a required filing of any corporation that has been registered in another state (its domestic state) and is considered by the state to be doing business in California. While the state will not offer to interpret the law on your behalf, and while legal advice is always best sought from your lawyer or legal advisor, a loose, general rule of thumb is that if you run an online store and someone living in California purchases an item, you are not considered to be doing business in the state — but if you open a corporate office in California and ship the sold goods from there, you likely would be required to file a California Foreign Corporation.

What will I need in order to receive my California Foreign Corporation?

There are a number of documents you must submit in order to register and conduct business as a foreign corporation in California.

  • Statement and Designation by Foreign Corporation

When you’re ready to register your foreign corporation in California, you will draft a document similar to the Articles of Incorporation you used to start your business in your domestic state, called the Statement and Designation by Foreign Corporation form. This form will ask for information about both your existing business and your new business.

The Foreign Corporation form will include information on the following:

  1. The legal name of your corporation, as it is laid out in the most recent version of your Articles of Incorporation in your domestic state
  2. The jurisdiction under which your corporation was initially formed; your domestic state
  3. Your principle executive office address, likely located within your domestic state
  4. The address you intend to you use in California, if applicable (it is perfectly possible to be legally considered doing business in California without holding an office in the state)
  5. Your agent, or registered agent, who is to be the contact person for the California foreign corporation and is to have a physical home address in the state
  6. Signature and affirmation of a corporate officer

Relative to many other states, the California Foreign Corporation formation document is very simple — the printed form takes up only two pages.

  • Certificate of Good Standing

Sometimes also called a Certificate of Existence or Certificate of Fact, the Certificate of Good Standing is a document from your domestic state showing that you not only exist but that your corporation has a status within the state of Active, and that it is in good standing in the domestic state. If your Certificate of Good Standing shows that you are in Default, you will not be allowed to register your California Foreign Corporation until you have corrected whatever issue was keeping you from being in good standing.

This requirement is not specific to California — most states require a Certificate of Good Standing or similar document. Not all states have this requirement; in Texas, for example, you are required to confirm that your corporation is in good standing in its domestic state, but no formal documentation to support this claim is required. (Although if you lie, the Texas Secretary of State will be less than pleased and your ability to legally conduct business within the state will be revoked.) Other states, such as Virginia, require, rather than the Certificate of Good Standing, the original Articles of Incorporation and any subsequent filed amendments, certified by the Secretary of State.