YINGHAUNG AsksI am a small business owner in different state where I want to do business. I want to start a business in a neighboring state. Can you help us with some information?

Mr. BizPlan AnswersLets say that you want to register your business in North Dakota. You can start the registration process by contacting the secretary’s of state office.  Their website is www.nd.gov/sos  The following is information regarding foreign corporations provided by their website:

Foreign Corporation

A foreign corporation is one that has filed articles of incorporation under laws other than the laws of North Dakota. “Foreign” refers to corporations incorporated in jurisdictions out-of-state as well as out-of-country.A foreign corporation must obtain a certificate of authority from the Secretary of State:

To transact business in North Dakota; or

To obtain any license or permit issued according to North Dakota laws.

A foreign corporation may obtain a certificate of authority to transact any business purpose except banking, farming, and insurance (insurer backing claims). Insurance agencies selling insurance products may obtain a certificate of authority to transact business.

A foreign corporation using a name other than its corporate name must comply with the Trade Name Registration requirement as described above.

In addition to the above documents you will need to obtain an Employee Identification Number from www.irs.gov , a sales tax number and employee payroll related forms.The process usually goes something like this:

1. Register with Secretary of State2. EIN / Tax ID Number

3. Sales and Use Tax Permit

4. Employee State Payroll

While North Dakota is an unlikely candidate for foreign business registration there are states with favorable tax laws where “foreign corporations” are registered all the time. A few examples are: Nevada – Zero State Income Tax, Delaware – Favorable Laws for Banking institutions, and South Dakota – Favorable State Income Taxes.You can register your business in any state you choose…just keep in mind two things: 1) You will need to have a registered agent in that state to accept mail on behalf of your company and 2) You need to file a certificate of authority in any state where you physically transact business.

Read our Business Registration - Overview article for more information.

I hope this helps

Mr. BizPlan