Running head: case problem 10
Business law 1
CARDINAL STITCH UNIVERSITY
A corporation conducting business in one state when incorporated or chartered in another is considered a foreign corporation.
If your corporation will conduct business in any state or states other than the state in which it was incorporated, you'll need to determine what qualifications or registrations are required by the other state or states.
Some states have strict requirements regarding agents for service of process. Be sure to check on this. Some states also require that foreign corporations state their assets and liabilities. Registration or qualification of a foreign corporation must take place as close as possible to when the corporation starts doing business in another state. There will be a filing fee for registering as a foreign corporation.
Many states also require a Certificate of Good Standing (also called Certificate of Authorization or Certificate of Existence) to be filed by a foreign corporation along with the Statement or Registration described above. These certificates are issued by a state official of the state of incorporation as evidence that the corporation exists and is authorized to conduct business in that state.
This is for the main advantage of a limited liability company is the protection it provides to an owner's personal assets in case of business failure or a lawsuit against the business. Essentially, the personal assets of an LLC owner cannot be used to pay the debt or court settlements of the business, with a few possible exceptions to the rule. If an LLC owner were to personally injure someone, sign as a guarantor for business loans, fail to pay employer taxes, commit fraud or an illegal act that harms the business or someone else, or conduct personal business utilizing LLC equipment or money, a court may allow the seizure of personal assets.