Foreign qualification is the process of registering a business entity to legally operate in a US state other than the state of incorporation. Also called "registering to do business," "qualifying," or "foreign registration," it is required whenever a company has sufficient business activity (nexus) in another state, typically including having employees, a physical office, holding inventory, generating significant revenue, or having other substantial operations there. "Foreign" in this context means out-of-state, not out-of-country; a Delaware C-corp operating in California needs to foreign-qualify in California.
The requirements: each state defines its own nexus rules, but common triggers include employees working in t...