Do I have to register my business in a state other than Delaware?

Most state laws provide that a “foreign corporation” (i.e., a corporation or LLC formed under the laws of another state) may not “do business” within the state unless it qualifies under appropriate statutory provisions. The scope and extent of the company’s activities will govern whether qualifications will be necessary. Typical activities that will require a corporation to qualify to do business in a state are:

1. transaction(s) of a substantial amount of its ordinary business in the state;
2. maintaining an active office in the state; and
3. manufacturing products in the state.

However, activities of substantially less magnitude may also require qualification. You should talk to competent legal counsel about whether the company needs to “qualify” in another state.

Even if qualification is unnecessary, the company may be obligated to pay corporate income and other taxes (including sales and use taxes) because of operating in a state (a detailed discussion on paying taxes in other states can be found here).