We routinely have clients who inquire about using their Indiana entities to begin operations in other states—especially our clients with businesses in cities near the Indiana border. Because of the nationwide recession and slow recovery, business owners hoping to sell their ongoing concerns have had to search across several states for potential buyers, increasing the number of small businesses simultaneously operating in and out of Indiana. At the same time, some entrepreneurs are betting on the rebound of a poor economy by taking a national approach in expanding business operations. Before beginning those out-of-state operations, it is extremely important to understand the legal procedures for operating your business in another state.
Most states require out-of-state businesses to file a form called a “foreign intent to do business.” The filing fee for this form can vary drastically state by state. One thing that every state does require on the form is that the business has a Registered Agent in the foreign state. Many attorneys offer this service for a small fee, and many national companies offer Registered Agent services. The Registered Agent simply serves as a point-person in the foreign state to receive state correspondence and legal service documents on your business’s behalf.
Once the form is completed by the business owner as well as the Registered Agent, most states require a “Certificate of Existence” or “Certificate of Authority” from the originating state that the business was organized in. Indiana charges a small fee online to generate this form. If everything is filed properly, most states will approve the filing within a few weeks and issue a certificate to the business owner authorizing business operations in the foreign state.
Once approved, the business owner may file for assumed business names and begin the accreditation process with various accreditation bodies such as the Better Business Bureau (“BBB”). Also, the business owner may begin business operations, as defined by the foreign state’s relevant statute, only after receiving the foreign state’s approval. There can be severe fines and penalties for a business owner that begins operations in a foreign state without first receiving the approval from the foreign state’s Secretary of State. If you own an Indiana business and wish to begin operations in another state, be sure to contact an Indiana business attorney to help guide you and expedite the process.
