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. Shell Corporation

    A corporation without active business operations or significant ...
  2. Subchapter S (S Corporation)

    A form of corporation that meets the IRS requirements to be taxed ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at ...
  4. Corporation

    A legal entity that is separate and distinct from its owners. ...
  5. Closed Corporation

    A business that is set up using a corporate business structure, ...
  6. PCI Compliance

    Technical and operational standards that businesses are required ...
RELATED FAQS
  1. Do small banks ever act as custodians?

    Generally speaking, the market for custodian bank services is dominated by large banks. The best banks tend to grow in size, ... Read Full Answer >>
  2. How can I lower my effective tax rate without lowering my income?

    There are lots of ways to lower your effective tax rate, although your individual circumstances determine whether you can ... Read Full Answer >>
  3. Why is a Free on Board (FOB) designation important for freight transportation?

    A free on board (FOB) designation specifies whether the buyer is responsible for freight charges and determines the obligations ... Read Full Answer >>
  4. How does the market share of a few companies affect the Herfindahl-Hirschman Index ...

    In economics and commercial law, the Herfindahl-Hirschman Index (HHI) is a widely used measure that indicates the amount ... Read Full Answer >>
  5. How does the International Chamber of Commerce define the term 'Free on Board' (FOB)?

    The International Chamber of Commerce (ICC) is one of world's largest business organizations and has published a set of trade ... Read Full Answer >>
  6. What determines if an international trade is Ex Works (EXW) or Free on Board (FOB)?

    "Ex works" (EXW) and "free on board" (FOB) are international trade terms that dictate the responsibilities of buyers and ... Read Full Answer >>
Related Articles
  1. Investing Basics

    The Basics Of Corporate Structure

    CEOs, CFOs, presidents and vice presidents: learn how to tell the difference.
  2. Fundamental Analysis

    Interpreting A Company's IPO Prospectus Report

    Learn to decipher the secret language of the IPO prospectus report - it can tell you a lot about a company's future.
  3. Entrepreneurship

    Should You Incorporate Your Business?

    Find out how becoming a corporation can protect and further your finances.
  4. Economics

    Explaining the Human Development Index

    The Human Development Index (HDI) is a metric developed by the United Nations to take the emphasis off economic growth and focus on human wellbeing.
  5. Economics

    Gaining Market Influence-- The Case of US Shale

    A convergence of sustained bank financing, falling production costs and rising oil prices might position the US shale industry for a greater market role.
  6. Taxes

    Corporate Tax Rates: The Highs and the Lows

    The United States is No. 2 in the world for its high corporate tax rate. There are ways around paying it, and many nations with lower rates are worse off.
  7. Professionals

    What the DoL’s Fiduciary Policy Means for Advisors

    After many delays, the DoL's new fiduciary policy is coming. Here's an overview on what financial advisors should expect.
  8. Entrepreneurship

    What's the Verdict on START-UP NY?

    START-UP NY is an initiative designed to attract companies to New York State by giving them 10 years of tax breaks. Sounds good, but is it a success?
  9. Economics

    Infrastructure Investment & Institutional Reforms

    There has been a lot of buzz in the market lately about the prospect for growth and stability in Latin America.
  10. Investing

    Market Crisis: Does Diversification Still Work?

    If you still aren’t sold on the benefits of international diversification, you may object that: Diversification didn’t work during the last market crisis.

You May Also Like

Hot Definitions
  1. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  2. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  3. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  4. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  5. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  6. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
Trading Center