Here's what to do after you've filed for foreign qualification in another state, listed in order of priority. Getting insurance, taking care of bookkeeping and accounting, and securing business licenses for your business in its new state are must-dos. Find out what else should be on your list.
1. Have Your Business Insured in All States
Business insurances provide extra security and protection for your expanding venture. Operating your business in a new state could result in higher revenues, requiring higher coverage. And outdated insurance information can also render a policy void or inadequate.
Any major change in how your business is conducted needs to be reflected in all business insurance coverage. Major business changes can include a few scenarios:
- Offering new products or services
- Getting or revamping an office space
- Building a website
- Hiring employees
- Purchasing new capital equipment
There are several business insurance policies available, but here are a few key ones you’d most definitely need to look into once you’re foreign qualified:
As your business evolves, revisiting your insurance support system will help you conduct business in the new state and avoid potential lawsuits.
2. Perform Bookkeeping for All States
Each state has its own specific tax brackets and statutes, and you'll need to be aware of what each state requires to avoid potential extra fees or paying double taxes. For instance, not all states provide credit for taxes paid in another state. If you’re a resident of Virginia but earned income in Arizona and paid taxes on it, you can’t claim credit for it.
Invest in bookkeeping software if you are a DIY kind of business owner or use Bizee’s Bookkeeping and Accounting service. A professional service will help with monthly bookkeeping and enable you to secure maximum deductions across all states of operation. Operating in another state can double your amount of work when it comes to bookkeeping and accounting. Our service will take care of all of it for you, saving you a ton of time.
3. Secure or Renew Business Licenses and Permits
Your business could be subjected to federal, state, city, and local licenses and permits in a new state. It all depends on your industry, business size, and location. Licenses and permits allow you to operate legally. Here are some of the common small business licenses you may need:
- General Business License: This general business license can be required at the state or local level. Few states, like Alaska, Delaware, and Nevada, require all businesses to have a state-issued license in addition to any applicable local operating licenses.
- Occupational or Professional License: Many states and cities require industry or service-based licenses. These licenses show that your business has the skill and knowledge to do a specific job while complying with safety and environmental protocols. Occupational licenses apply to various professions, including make-up artists, accountants, doctors, nurses, teachers, lawyers, therapists, electricians, and plumbers.
- Health Permit: If you are in the food and beverage business or running a hair salon, you would be subjected to local health permits. These permits typically require an inspection to make sure your business is safe for the public.
- Building or Zoning Permit: These permits are required by city or county government bodies. You might need one if you are a home-based business, are leasing an office in a commercial area, or are making renovations.
Most business licenses and permits must be renewed annually or biannually. Figuring out what license you need, filing the right paperwork, and tracking all the renewal times could be time-consuming. Bizee's Business License Research service helps you get a hold of all licenses required and assists with filing. We’ll also keep you updated on the latest licensing requirements so your business stays on the right side of the law.
4. Update Local Business Listings
The first task for doing business in another state is to update all the relevant and local business listings, such as Google My Business, Yelp, and Yellow Pages. By creating and updating all your online business listings, you're improving your business’s online visibility and searchability. In fact, accurate listings can improve conversion rates by up to 80%.
Consistent information across all business listings also builds trust and credibility and strengthens your brand image. But how many business listings do you need? Analysis has found that using 30-40 listing services optimized returns at over 320% more than a single listing.
5. Get a Virtual Address and Mailbox
As a foreign-qualified business, you’ll need a legal business address to form the company in your new state and receive mail. A virtual address will give you a real street address in the state and allow you to check your mail wherever you are.
Using your home address can expose your private information when you're operating in a new state. And getting a physical office space might not be immediately feasible or a top priority. A P.O. Box won't be accepted on formation paperwork and doesn’t create the same credibility and trust as a physical address.
But do you need a physical address in the new state? Not necessarily. A virtual address and mailbox will give your business a corresponding legal address and a place to receive mail and small packages. Bizee’s Virtual Address service priorities value and privacy and can set you up with an in-state address for your Foreign Qualification in minutes.
6. Get a Registered Agent in All States
All states require you to have a Registered Agent, and the compliance requirements vary from state to state. So, if your home state is Georgia, and you are foreign qualified for Florida, you also need to appoint an in-state Registered Agent for Florida.
Some business owners consider listing themselves or a family member as a Registered Agent in order to save money. It’s legal to do this, but this comes with some risks. Your agent needs to be available during regular business hours to receive all legal notices and documentation. For example, if you missed your sales tax filing notification because the agent wasn't in office, you could lose your Certificate of Good Standing with the state and face hefty fines.
Bizee offers a Registered Agent service that will keep your business in compliance across all 50 states. If you opt to form your business in a new state with us, you’ll get a Registered Agent service for free for the first year.
7. Don’t Forget Your Multi-State Annual Report Requirements
You’ll need to file an annual report in your home state and in every new state where you are foreign qualified. It provides the state, investors, and other public bodies with vital information regarding your business, its activities, and finances.
This requirement usually starts in the year of formation and only ends when the business is formally dissolved. Annual reports need to be filed even if your business didn’t make any sales.
Each state has different annual report requirements, filing procedures, and fees. Here are some examples:
- Some states, like Ohio, don't require an annual report at all. Other states require these “status” reports annually or biennially.
- Some states only require annual reports for certain types of business entities. For example, Oklahoma only requires annual reports for LLCs.
- States also have different filing due dates. States like Florida and New Hampshire require all annual reports to be due on May 1. Other states' deadlines are tied to your date or month of formation.
- Your state’s fees might be a fixed or variable amount that’s tied to revenue or the number of members.
Failure to file an annual report can result in fines, such as late payment charges. Continued non-compliance will lead to the loss of your Certification of Good Standing, the administrative dissolution of your business, or the revocation of your foreign qualification standing and any running business contracts. It can also disqualify your business from getting funding since lenders need proof of good standing.
A professional Annual Report service like Bizee's can help you avoid common annual report filing errors, such as using the wrong form, having incorrect or missing information, and submitting an erroneous payment.
8. Renew or Create Business Contracts With Free Templates
As your business expands, you could deal with more customers, work with new suppliers and contractors, or hire more people. The new state might have different laws that can impact how your business is conducted.
Therefore, these changes must be reflected in your business contracts.
Commonly used small business contracts include vendor contracts, employment contracts, website linking agreements, or general operating agreements.
If you form your business or Foreign Qualification with Bizee, you can check out our Bizee’s Contract Template Library which provides you access to 30+ business contracts you can customize. These contracts set the right expectations between parties and provide your business with a framework for operations.
