D.C. Foreign Corporation Registration
D.C. foreign corporation registration is required for out-of-state businesses that want to do business in Washington, D.C.3 min read
D.C. foreign corporation registration is required for out-of-state businesses that want to do business in Washington, D.C.
Corporations that are headquartered in another state need to file as a foreign corporation with the Department of Consumer and Regulatory Affairs (DCRA). After the paperwork has been filed, corporations will receive a completed certificate of authority. The process to register is fairly simple, but it must be done before business transactions can occur.
Filing as a D.C. foreign corporation is different than being an out-of-country corporation. Any corporation that wasn't formed in Washington, D.C. is considered a foreign corporation.
What is a Foreign Corporation?
If your corporation was created outside of Washington, D.C., you need to register the business in order to operate in D.C.. Most people understand this rule as applying to any business that collects state sales tax in a different state. In order to be valid, the company must have a physical presence in the state. This can be anything from a warehouse or sales office to a store, employee, or sales representative in that state.
D.C. is different from other states because it doesn't have specific laws for registering foreign LLCs, but instead has laws that cover the general registration of foreign businesses.
In this case, foreign doesn't mean from a different country. In Washington, D.C. a business is considered a foreign LLC if it was formed in another state. Foreign refers to a business organized under the laws of another state. A domestic LLC is formed in the state where it does business. An LLC that was formed in Texas is foreign in California, but it is considered domestic in Texas.
There are numerous activities that a company can do in another state without being considered a foreign corporation, including:
- Settling or defending a lawsuit
- Holding member or manager meetings
- Having an office or employees in the state for handling the business's securities
- Selling via independent contractors
- Collecting certain debts
- Operating under interstate commerce
- Getting orders that require acceptance from another state before they can be finalized
- Conducting a single transaction that will not be repeated
- Securing a mortgage or other property interests
- Opening a bank account in the state
There are other activities that can also remove a business from having to file for foreign corporation status. If your business is only operating in D.C. under one of these pretenses, you do not have to file foreign corporation paperwork.
Steps to Registering as a Foreign Corporation
The process for filing as a foreign corporation in Washington, D.C. is fairly easy.
- First, search to make sure your LLC's name is available in Washington, D.C. You can't register with the same business name as an existing company, and the name must be distinguishable from other existing companies. The company name must include the words, “incorporated," “company," “limited," or “corporation” to be valid. If your desired name is already registered to someone else, you can choose an alternate name that follows the guidelines. Once the paperwork is approved, you can do business under the original name and no longer have to use the alternate name to perform business.
- File a Foreign Registration Statement form with the Department of Consumer and Regulatory Affairs Corporations Division. This can be done online.
- Pay the $220 filing fee.
- Attach a Certificate of Good Standing from your corporation's home state.
- Appoint a D.C. registered agent.
Once the foreign registration is approved, you must file a new report by April 1 of the following year, which requires a $300 filing fee. Additional reports are due every two years on April 1.
D.C. Registered Agent
In order to file for D.C. foreign registration, the corporation must appoint a D.C. registered agent. This is to ensure that there is a contact person in the area to answer questions. Some companies bring in their own employee to fill the role, and others contract out to a registered agent firm. This person has numerous duties and responsibilities, including:
- Hold a physical address, not a post office box, in D.C.
- Maintain regular business hours
- Accept official business mail for the clients
- Forward all documents to clients in a reasonable timeframe
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