Foreign Qualification

AAA

DEFINITION of 'Foreign Qualification'

Legal permission for a corporation to do business in a state other than its home state. Without first obtaining foreign qualification, a corporation may not legally do business in another state, or if it does, it may not be granted the protection of that state's court system. A corporation that maintains an office and/or seeks clients in another state may be considered a foreign or out-of-state entity and may need to obtain foreign qualification status to officially conduct business out of state. Without this status, the company could receive an injunction against doing business in the state.

INVESTOPEDIA EXPLAINS 'Foreign Qualification'

The secretary of state is responsible for granting foreign qualification in each state. The typical process for obtaining foreign qualification is to file an application and pay a fee of a few hundred dollars. It may also be necessary to name a company representative who is located in the foreign state and establish a fictitious business name not already in use in that state. The corporation will receive a certificate of foreign qualification when its application is approved. These regulations may also apply to limited partnerships, business trusts and limited liability companies. Foreign qualification rules vary by state.

RELATED TERMS
  1. Corporation

    A legal entity that is separate and distinct from its owners. ...
  2. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at ...
  3. Subchapter S (S Corporation)

    A form of corporation that meets the IRS requirements to be taxed ...
  4. Shell Corporation

    A corporation without active business operations or significant ...
  5. Closed Corporation

    A business that is set up using a corporate business structure, ...
  6. Licensed For Reinsurance Only

    A license that allows a company to engage in services related ...
Related Articles
  1. ogether, management and the board of directors have the ultimate goal of maximizing shareholder value.
    Investing Basics

    The Basics Of Corporate Structure

  2. Fundamental Analysis

    Interpreting A Company's IPO Prospectus ...

  3. Entrepreneurship

    Should You Incorporate Your Business?

  4. Economics

    The New Global Banking Regulations To ...

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center