The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.
Although a Delaware company can operate all over the world, there is an additional step any Delaware corporation or LLC must take in order to be in compliance with its home state—or any other state in which you’d like to operate your company.
This extra step is called Foreign Qualification. It is called Foreign Qualification because your Delaware company is considered domestic to Delaware and foreign to every other state.
Foreign Qualification is the process in which your home state gives you permission to operate your Delaware company in that state. This step is both necessary and normal, regardless of whether you are operating a Delaware LLC or a Delaware Corporation.
Every state in the country mandates different requirements when it comes to registering foreign entities to do business. Vermont, like many other states, stipulates a state fee, an application process and a Certificate of Good Standing from Delaware.
Vermont also dictates that a Registered Agent be documented on the Application for Authority (the name of the Foreign Qualification application). It will be the Registered Agent’s job to receive any notices from the Secretary of State of Vermont and forward them to your company’s contact person.
Vermont will need a responsible party to sign the application. For an LLC, this is often the Managing Member. For a corporation, this is typically the president.
The Registered Agent does not need to sign the application. Vermont does not have a publication requirement, unless there is a specific requirement in the county in which the business is operating.
Once your company is properly registered as a foreign entity in Vermont, you will be responsible for submitting a Vermont annual report, which must be filed by March 15.
The cost of the Vermont annual report is $140 per year for a foreign LLC and $200 per year for a foreign corporation. The annual report notices are mailed to the address of your Registered Agent. The annual report can be filed by anyone with the authority to do so by your company.
We can take care of your company’s Foreign Qualification process and act as your Vermont Registered Agent.
For more information on foreign qualifying your company in Vermont or to start the process, please call 1-800-345-2677, Extension 6130 or email me.
In our ongoing quest for online tools that can help us prosper in our industry, we have found another tech product that we’d like to share with you.
With RightSignature, we at Harvard Business Services, Inc. can now offer our clients the option of signing documents without having to print them out—they can use their mouse or finger, directly from their computer, smartphone or tablet.
When clients are on the go, they may not have time to print a document, sign it and fax it back. They could be driving, sitting in an airport or may just not have access to a printer, fax machine or scanner.
However, thanks to RightSignature, this will no longer be a problem. When clients receive a document from us that needs information and/or a signature, they are prompted to fill out the necessary information and only that information.
They cannot send the document back if they have not filled in all the information we have requested—this cuts down on human error and saves both us and our clients a considerable amount of time.
The document is clearly marked and the Submit button is easy to find. There is also a Help link if a client should need assistance, though RightSignature is really very self-explanatory and easy to use.
The great part about utilizing RightSignature is that it will allow clients to sign as well as type information directly from their screens. Clients can sign their name with their finger, type their title underneath the signature, and also date the document just by clicking on a date from a calendar dropdown.
When attorneys require signatures from their clients, they can easily forward documents by email to them; the clients can then sign the documents directly from their computer or smartphone and then send the document back to the attorney, all in a short period of time.
An online tool like this can help speed up business interactions, save paper and increase the convenience factor for your clients.
HARVARD BUSINESS SERVICES, INC. IS NOT AFFILIATED WITH RIGHTSIGNATURE.
Business owners often form LLCs in Delaware in order to take advantage of Delaware’s sophisticated and superior corporate law structure. Delaware’s corporate law structure has been ranked first for a number of years based on its ability to provide the best protection for the members behind the LLC.
When a business is incorporated in Delaware, your company is considered domestic to Delaware and foreign to every other state. To obtain the authority to operate in your home state with a Delaware LLC, the company must typically be registered in your home state as a foreign entity.
This process is called Foreign Qualification. It is the way in which your home state gives you permission, or authority, to operate your Delaware LLC in that state.
Each state has different requirements for Foreign Qualification. Virginia, like most states, has an application process and a state fee for Virginia registration for a Delaware LLC.
The state of Virginia also requires additional documentation from your Delaware LLC. In addition to the application process and state fee, Virginia requires a Certified Copy of the Certificate of Formation, including all amendments that may have been filed.
Once your Delaware LLC is registered as a foreign entity in Virginia, you will be responsible for Virginia’s annual fee, in order to remain in good standing. A foreign LLC operating in Virginia will pay an annual fee of $50 per year.
Please keep in mind that once you register your Delaware LLC as a foreign entity in Virginia, you will still be responsible for the Delaware Registered Agent Fee as well as Delaware Franchise Tax in order to remain in good standing in Delaware.
If you have any questions regarding Foreign Qualification for your Delaware LLC in Virginia, please feel free to contact us at 1-800-345-2677, Ext. 6130.
B Lab is a non-profit corporation that certifies B Corporations—it offers a variety of support, varying from access to the Certified B Corp logo to introducing new Certified B companies to a large, lively community of other Certified B Corporations.
“B Corp is to business what USDA Organic certification is to milk.”
A Certified B Corp is a for-profit corporation that has been certified by B Lab, which is a non-profit company that measures a company’s social and environmental performance against the standards in the online B Impact Assessment.
There are over 1,800 Certified B Corps in over 50 countries across 130 different industries.
B Lab’s goal is to build “a global community of Certified B Corporations who meet that highest standards of verified, overall social and environmental performance, public transparency and legal accountability.”
A Certified B Corporation is a company that has passed B Lab’s certification process, which involves assessing and possibly changing some of its methods in regard to social and environmental performances (i.e., how it treats its employees and how it treats its garbage).
There are five significant conditions to a Certified B Corporation (although some of these conditions overlap with Benefit Corporations, Certified B Corporations and Benefit Corporations are not the same thing).
According to B Lab, the six conditions that define a Certified B Corporation are:
Different types of companies require different types of certification. The four categories are:
How Are Companies Assessed by B Lab?
The Assessment asks questions to help corporate leaders understand how—and why—“to build a better business—better for your workers, community and the environment.”
You can measure your company’s social and environmental impact on your own, using B Lab’s free, confidential B Impact Assessment.
Why Use B Corp’s Impact Assessment?
30 minutes can give you a snapshot of your company’s impact, which includes a basic summary of which things your company excels at and which it could improve upon. 2 - 3 hours gives you a full impact report, which includes a holistic report on how your company scores on a single impact topic.
Within the B Impact Assessment, you can also access improvement tools, best practices guides and case studies as well as create a customized plan for your company’s improvement. Standards and benchmarks can help you reach your improvement goal.
Why Assess Your Company and Why Change?
If you doubt that one company—yours—can make a difference in the world yet still make a profit, consider this: according to the comprehensive study entitled Sustainability Pays: Studies That Prove the Business Case for Sustainability, “businesses can improve short-and long-term profitability through the adoption of sustainable practices […].
If you don’t believe that people pay attention to or care about the sustainability issues of the corporations they work at, work with or buy from, you’re wrong.
According to the Harvard Business Review, millennials, who represent about 50% of the global workforce, seek work that connects them to a larger purpose.
The Impact Assessment is designed for any type of for-profit company and any size of for-profit company.
The questions posed on the Impact Assessment will be tailored to the number of employees you indicate, so owners of a small business can take the Impact Assessment as well.
The Impact Assessment “comprehensively covers the impact of a businesses on all of its stakeholders, including its workers, suppliers, community and the environment.
The Assessment also captures best practices regarding mission, measurement and governance.” The most heavily-weighted part of the Assessment deals with each company’s specific business model.
Since the Impact Assessment measures current and previous business performance rather than planned intentions, start-ups tend to utilize it only as a learning tool—since they haven’t yet existed long enough to measure their impact, start-ups can instead weave the appropriate practices into their companies for future success.
Why Become a B Corp?
The B Corp Declaration: As B Corporations and leaders of this emerging economy, we believe:
If you would like more information on becoming a Certified B Corporation, our friends at B Lab offer more detailed information as well as ongoing support.