What is Foreign Qualification?
Foreign qualification is the process of registering a business so it can legally operate in a state other than the one it was formed in. When you form a business, it exists under the laws and regulations of the state it’s formed in. In order to start operations in a different state, you’ll have to meet all of that state’s laws as well. Foreign qualification allows you to do this and maintain full legal compliance.
Why Does A Company Need Foreign Qualification?
Why You Need To Do It – Any LLC or corporation will have to foreign qualify if it wishes to begin operations outside its home state. This includes opening a warehouse or rental shop and even includes just having a single employee working as a representative for your business within Vermont.
When Should You Do It? – As soon as a company decides that it will be operating in Vermont, it should begin the process of foreign qualification in order to ensure full compliance and that no delays impede its business plans. Generally, you will need to receive Vermont foreign qualification if your company falls under any of the following criteria:
- Has a physical presence in Vermont
- Buying a property there
- Have remote employees
- Accepts orders in Vermont
- Owns a bank account in Vermont
What Happens If Your Entity Does Not Foreign Qualify?
You will be unable to bring forth any kind of lawsuit in Vermont. You’ll also be held responsible for fees and penalties including tax related fines such as back taxes and fines associated with nonpayment.
Steps To Obtain Foreign Qualification
There are a few steps that must be taken in order to obtain your Vermont foreign qualification. These include the following.
1. Obtain Certificates – You will have to start by filing an Application for Certificate of Authority. You will need to request this form if you want to mail it in, otherwise you can file online through the Vermont Secretary of State website. You should also obtain a Certificate of Good Standing or the equivalent from your company’s home state. Vermont also requires you to include a self-addressed envelope.
2. Collect And Submit Information – The forms will request a variety of information about your business.
LLC
- LLC name or a similar identifier
- Name of the home state
- Fiscal year end month
- Purpose of the business
- Business email address (optional)
- Principal office street address and mailing address
- Name and address of the registered agent in Vermont
- The management structure
- Names and addresses of managers and members
- Effective date of application
- An authorized signature
Corporation
- Corporation name
- Verify if nonprofit or profit
- The month when the fiscal year ends
- Purpose of the business
- Name of the home state
- Date of formation of the corporation
- Business email address (optional)
- Name and address of the registered agent
- Principal office street address and mailing address
- Names and addresses of current officers and directors
- Effective date of application
- An authorized signature
3. Appoint Registered Agent – The registered agent is the person responsible for handling the specifics of your foreign qualification as well as the ongoing compliance. Most businesses will allow a third party organization like DoMyLLC to serve as their registered agent to simplify their daily workload.
4. File The Application – Upon finishing the application file it with the Secretary of State along with the filing fee of $125 for both an LLC and Corporation. You may file by mail or through the online portal.
5. Ongoing Maintenance – Businesses must file annual reports to remain compliant in Vermont. For a corporation or LLC this is due 2 and a half months after the end of the fiscal year, generally around the middle of February. It costs $200 for a corporation to file the annual report and $100 for an LLC to do so.
There are a few steps that must be taken in order to obtain your Vermont foreign qualification. These include the following.
1. Obtain Certificates – You will have to start by filing an Application for Certificate of Authority. You will need to request this form if you want to mail it in, otherwise you can file online through the Secretary of State website. You should also obtain a Certificate of Good Standing or the equivalent from your company’s home state. Vermont also requires you to include a self-addressed envelope.
2. Collect And Submit Information – The forms will request a variety of information about your business.
LLC
- LLC name or a similar identifier
- Name of the home state
- Fiscal year end month
- Purpose of the business
- Business email address (optional)
- Principal office street address and mailing address
- Name and address of the registered agent in Vermont
- The management structure
- Names and addresses of managers and members
- Effective date of application
- An authorized signature
Corporation
- Corporation name
- Verify if nonprofit or profit
- The month when the fiscal year ends
- Purpose of the business
- Name of the home state
- Date of formation of the corporation
- Business email address (optional)
- Name and address of the registered agent
- Principal office street address and mailing address
- Names and addresses of current officers and directors
- Effective date of application
- An authorized signature
3. Appoint Registered Agent – The registered agent is the person responsible for handling the specifics of your foreign qualification as well as the ongoing compliance. Most businesses will allow a third party organization like DoMyLLC to serve as their registered agent to simplify their daily workload.
4. File The Application – Upon finishing the application file it with the Secretary of State along with the filing fee of $125 for both an LLC and Corporation. You may file by mail or through the online portal.
5. Ongoing Maintenance – Businesses must file annual reports to remain compliant in Vermont. For a corporation or LLC this is due 2 and a half months after the end of the fiscal year, generally around the middle of February. It costs $200 for a corporation to file the annual report and $100 for an LLC to do so.
What Is the Difference Between Foreign Qualification And Incorporating?
Incorporation is a process that creates a totally new business. Foreign qualification doesn’t create a new company and instead simply allows existing corporations or LLCs to begin operating outside their home state.
How DoMyLLC Can Assist With Streamlining The Process
Business leaders today have a tremendous amount of things to focus on. The red tape involved in foreign qualification means that they have to spend hours away from leading their business. We take over for you and take the hard work off your shoulders. We provide:
- Dedicated account manager
- Name availability checks
- Full filing and registration
- Ongoing support when you need it
We handle the entire process of Vermont foreign qualification so you can focus on running your business the way you want. Contact us to learn more.
Vermont Foreign Qualification FAQs
What Paperwork Is Required?
You must obtain a certificate of good standing and file it along with an Application for Certificate of Authority.
What Fees Are Needed?
You must pay a flat filing fee of $125 for both an LLC and Corporation.
Who Can File For Foreign Qualification?
Any business located outside of Vermont that wishes to begin doing business in the state.
Do You Need An Attorney For Foreign Qualification?
No attorney is required. However, businesses may still wish to speak to their lawyers to ensure that they take all of the right steps for their business.
What Information Is Needed For The Certificate Of Authority?
The form will request all basic business information including things like:
- Name of business
- Physical and mailing addresses
- Date of formation
- Date you’ll start operations in Vermont
- Names of members or managers
- Registered agent information
What If My Name Is Not Available?
Then you’ll have to file under a fictitious name and register that way. This has no impact on your business name in any other state.
Vermont Business Resources
Vermont Office of Secretary of State
Phone:
(802) 828-2386
Address:
Vermont Secretary of State
128 State Street
Montpelier, VT 05633-1104
If you’re interested in more info on foreign qualification, call 888-366-9552.