Updated August 9, 2016
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.
Florida also requires that you have a Registered Agent; the Registered Agent 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.
Harvard Business Services, Inc. is a specialist 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.
There are 2 comments left for Doing Business in Florida as a Foreign CorporationJORGE said: Friday, March 10, 2017
Please clarify. If the officers are not stated in a Delaware LLC, but when you register in Florida as Foreign Qualification, you must state it, so becomes Public information. The fees are double because you need to setup a company in Florida also. ThanksHBS Staff replied: Monday, March 13, 2017
Traditionally, LLCs are filed in Delaware without listing the names of the members with the state. This means changes in ownership can generally just be handled internally. The operations and management of the LLC are governed by a written agreement among its owners that is not required to be publicly filed or disclosed to the Delaware Division of Corporations. As a result, an LLC allows secure anonymity and the ability to create a customized management structure, which prescribes the economic relationship among owners. The agreement can be written in any language and is not required to be translated into English.
The Delaware LLC statute allows parties to define their business relationship in a written agreement as they so desire. This is called "freedom of contract." Delaware law provides rules only for those matters on which the parties have failed to agree. The stated policy of the Delaware LLC law is to give maximum effect to the principle of "freedom of contract" and to the enforceability of LLC agreements. The contractual flexibility offered by the Delaware Act is unmatched by any other LLC statute.
To read more about the LLC Agreement visit https://www.delawareinc.com/blog/101-on-an-llc-agreement/
Your business is considered domestic to the State where formed, and foreign in all other states. To take advantage of the strong corporate law structure, Delaware is by far the most popular domestic choice.
If your business will have a physical presence by operating, hiring employees, banking or even holding an asset in a state other than the state of Incorporation, clients will often qualify the business to operate in that state.
The foreign qualification process enables a company to transact business in a jurisdiction other than where it was formed. By failing to comply with local compliance issues, you may be putting the protection of your company at risk.
Since each state has its own requirements,we can help you with your foreign qualification. We have experienced filing specialists who can obtain all the required documents and prepare and file the specific forms for your state in a timely manner. The cost for the Florida foreign qualification, including Registered Agent Service, the Certificate of Good Standing and all State filing fees, will be $507.
For more information on the foreign qualification process https://www.delawareinc.com/blog/what-is-foreign-qualification/George said: Monday, December 19, 2016
If a domestic Delaware corp does its foreign qualification in Florida with you as registered agent in both locals, does the member's name show up in the Florida Public Records? How much to do both and how fast to have Certificate of Authority in hand this time of year?HBS Staff replied: Tuesday, December 20, 2016
George: Here is the link to the Florida Foreign Qualification process: http://form.sunbiz.org/pdf/cr2e007.pdf
Your principal office needs to be listed, as well as the names and addresses of all directors and officers.
The cost for us to prepare the document, pay the Florida fee and obtain your company's Certificate of Good Standing from Delaware (which must accompany the application) is $358. The entire process should take a couple of business days. Feel free to call us at 1-800-345-2677 for assistance or if you have further questions.