When a business entity starts seeing both sustained demand for its products or services, it’s only natural that discussions regarding the expansion of operations should start to occur. Indeed, while some business owners might be ready and willing to add on to existing facilities or build another site within their current state, others may be looking to commence operations in an entirely new location.
As exciting and encouraging as this latter prospect is, it’s important for those corporations looking to set up shop here in Georgia to understand their legal obligations as “foreign” entities.
What is a foreign entity?
Any business corporation, nonprofit corporation, professional corporation, limited liability company or limited partnership whose originating registration occurred in another state is viewed by the Corporations Division of the Georgia Secretary of State as a foreign entity.
Must all foreign entities register with the Secretary of State?
In general, state law dictates that any foreign entity looking to “transact business” in Georgia must first secure a certificate of authority from the Secretary of State.
While this would make it seem like a universal requirement, state law also outlines numerous activities that “do not constitute transacting business,” such that a company whose operations meet these parameters would technically not need to register.
What exactly is a certificate of authority?
A certificate of authority is really nothing more than documentation confirming that a particular business is registered with the Georgia Secretary of State.
How are certificates of authority secured by a foreign entity?
A business will need to complete the necessary application, which can be downloaded from the website of the Corporations Division of the Georgia Secretary of State.
Indeed, once the certificate of authority is secured, it should be filed along with a filing fee of $225 and an original certificate of existence with the Secretary of State.
What exactly is a certificate of existence?
Also referred to as a certificate of good standing, it’s a document secured from the home state of the corporation verifying that it is indeed registered there.
What all of this serves to underscore is that the process of corporations filing as foreign entities here in Georgia can prove to be exceedingly complex. As such, business owners should strongly consider speaking with an experienced in-state legal professional who can explain all obligations and handle all of the necessary details.