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Business owners often form a Delaware LLC or corporation in order to protect their personal assets. Delaware has long been known for having the strongest corporate law structure, and thus putting up the biggest wall between a business and the person behind the business.
When forming a Delaware company, your business is domestic to Delaware but foreign to every other state. Foreign Qualification is the process in which your home state gives you the authority to operate there using a company formed in another state. This blog will focus on companies that incorporate in Delaware but operate in New Mexico.
Each state can have different rules, policies and requirements for registering as a foreign entity. New Mexico has an application process and state fee, and requires your company’s Certificate of Good Standing from Delaware.
The Certificate of Good Standing is a document in which the state confirms that all of the Franchise Taxes have been paid, and that the company retains an active Registered Agent. A Registered Agent’s job is to receive any service of process, legal documents or annual notices for the company and forward them along to the communications contact at the company.
Often, business owners work with their Delaware Registered Agent in order to register their company as a foreign entity in New Mexico. We offer this service and help our clients register their company as a foreign entity in New Mexico (and every other state).
This service includes preparing the application, obtaining the Certificate of Good Standing and filing the package with the state of New Mexico. The document that New Mexico will provide once this application is approved is called a Certificate of Authority.
A Certificate of Authority is how New Mexico gives your LLC or corporation the authority to operate your Delaware company in New Mexico. The Certificate of Authority may be requested from your bank when your company goes to open a bank account, although each bank can be different in what they require.
New Mexico will also require that you have a New Mexico Registered Agent in order to receive any service of process, legal documents or annual notices. We can act as your New Mexico Registered Agent for $99 a year.
By incorporating in Delaware and registering as a foreign entity in New Mexico, your company will be operating under Delaware’s corporate law structure and protection, even though the business is being run from New Mexico. It is a smart and strategic move.
If you would like assistance with registering your Delaware company as a foreign entity in New Mexico, or have any additional questions, please call 1-800-345-2677 or email firstname.lastname@example.org.
*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.