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People from all over the world form Delaware LLCs and Delaware corporations even though they operate their companies from their home state or country. Delaware has been recognized as having the strongest corporate law structure, and the advantages of forming your business in Delaware are extensive.
But what do you do if you have a company doing business in Florida as a foreign corporation?
If you are operating a Delaware corporation in Florida, your corporation will be domestic to Delaware but considered a foreign corporation doing business in Florida. People initially form a Delaware corporation and then register as a foreign entity in Florida (as the same business).
This process is called Foreign Qualification. This is the manner in which Florida grants you permission to operate your Delaware corporation there. It is a very important step that is sometimes forgotten, but if you fail to comply with Florida's local compliance regulations, you may be putting yourself and your company at risk.
Florida, like most states, has a specific set of requirements for Foreign Qualification: a state fee, an application process and a Certificate of Good Standing from Delaware. The Certificate of Good Standing can be no more than 90 days old.
The state also requires that you have a Florida Registered Agent which will be required to sign the application. A Director or officer will also have to sign the application on behalf of the corporation. The document Florida returns to you is called a Certificate of Authority. This document is often used to obtain a business license, open a bank account or file a DBA in Florida.
Please keep in mind that applications and paperwork filed in Florida will be on the public record, unlike in Delaware. However, county filing and newspaper publication is not required, unless specifically mandated by the county of the Registered Agent.
Once your business is registered in Florida as a foreign corporation, you will be required to file an annual report. The cost of the annual report is $150, and is due by May 1 of the following year. Often, your Registered Agent will forward you the notice approximately 60 days before the due date. Please note that a Delaware corporation will still be responsible for Delaware Franchise Taxes as well, which are due by March 1.
We are specialists in Foreign Qualification, and we register companies in Florida, as well as other states, every day. We can help you prepare the application, obtain a Certificate of Good Standing from Delaware and file all the necessary documents in Florida.
Generally, we can obtain your Certificate of Authority in about two business days. We are also able to act as your Registered Agent in Florida. For more information, or to register your Delaware corporation in Florida and start doing business in Florida, please call 1-800-345-2677, Ext. 6130.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
There are 16 comments left for Doing Business in Florida as a Foreign CorporationJeff Rahn said: Thursday, October 7, 2021
Do I need to register my Delaware Corporation as a foreign corporation if my Delaware LLC merely owns property in the state of Florida and New York? I will not be employing anyone in Florida or New York nor will I be generating any rental income or income of any kind from these properties. These are strictly properties for personal use.HBS Staff replied: Thursday, October 7, 2021
Hi Jeff, thank you for reading our blog. We recommend you consult a corporate attorney for your situation.P.K.Senapati said: Monday, August 23, 2021
I am from Bangalore in India.Thinking of a Non Resident LLC at US Delaware. Interested in a Electronics /Information Technology suppliy chain partnership or Design Outsoursing uith a US combany. Suggest a US company name and product. Thanks P.K.SenapatiHBS Staff replied: Monday, August 23, 2021
Hello, thank you for reading our blog! We help entrepreneurs, such as yourself, get their businesses up and running in the State of Delaware. We do not provide advice on company names or product lines. You may have luck reaching out to a consultant or legal advisor to help you formulate a business plan for your specific industry. If you have a business name in mind and want to check it against the State of Delaware's registry, visit: delawareinc.com/name-check to complete a name check inquiry.Alex Bahram said: Friday, May 28, 2021
Hi. My corporation is incorporated in Nevada but operate out of NJ. We are looking to open an office in Miami for a few employees who have been working remotely there during covid. Is the best way for us to register as a foreign entity? And are there any additional tax implications with having a physical office when our FL employees already work remotely?HBS Staff replied: Tuesday, June 1, 2021
You are known as a Domestic entity to the state of Nevada and foreign to all other states so if you wish to hire employees, open a physical office location or open a bank account then the next step is to Foreign Qualify so you're in compliance with any local and state compliance matters. We are not Accoutants and for any tax implications this might have it would be best to speak with an Accountant.Sarah said: Sunday, January 31, 2021
I have a Delaware Corp with headquarters in Utah. I would like to hire a remote employee who lives in Florida. I am interested in your services.HBS Staff replied: Monday, February 1, 2021
Thank you for your question. We are happy to assist you in answering any questions you have regarding our services.David said: Tuesday, October 6, 2020
I registered a corporation in Delaware which I will be taxed as an S-Corp. and will register as a foreign entity in Florida. What income tax rate can I expect to pay. Will I only pay Delaware's state tax?HBS Staff replied: Tuesday, October 6, 2020
Hi David, unfortunately we cannot provide tax advice related to your specific situation. If you are unsure what your tax liability would be, we recommend checking with your accountant or a tax professional.