Authority to Transact Business

If you want to get certified in another state other than your home-state you should find out whether they require your business to be licensed or registered to do business as part of the certification process. (Note: There are some state agencies, like Florida DOT, that will only certify Florida-based businesses.) Some certification applications will clearly state that your firm must be “licensed” or “registered” to do business within their state prior to applying for certification; some even include a question asking if the firm is registered or licensed with the state. This authority to transact business is different from being a licensed professional contractor, engineer, architect, etc. It should be noted that if your company is looking to perform licensed services in another state, getting that license or permit should be done before seeking that state’s certification.

A number of certification applications aren’t clear about the firm being authorized to transact business within their state even though it maybe required. Often times the generic “all relevant license(s) and permits” or “all relevant licenses, license renewal forms, permits, and haul authority forms” under an application’s attachment list is meant to include the company’s proof of being licensed or registered to do business within the state.  And, as in all things government related, this can change.

Most states have applications for a certificate of authority on their Secretary of State’s web page. Not all web sites are user friendly and it can be difficult to find the application form you’re after. Using the site’s search function, try search terms like: “certificate of authority to transact business”, “authority to transact business”, “foreign business registration” or “foreign corporation”. Usually the form you need will be named similarly to the State of Missouri’s Application for Certificate of Authority for a Foreign For-Profit Corporation.

You’ll want to get the application form that fits your business. The common entity types found for authority to transact business applications are: Corporation (For-Profit), Professional Corporation, Limited Liability Company (LLC), Limited Partnership, Limited Liability Partnership, and Non-Profit Corporation. And, some states offer authority to transact business applications for cooperative associations.

Things to keep in mind:

  1. There is usually a fee involved with licensing and/or registering to do business. The fees can often be in the hundreds of dollars range, so target the states you want to do business in carefully.
  2. Most applications to transact business within a state will require a copy of a Certificate of Good Standing from your home-state. Be sure to find out if the application you’re filling out requires a current copy of this certificate.
  3. Generally, being a foreign business entity requires your company to have a registered and/or resident agent. A registered/resident agent is a company or person designated to receive official notifications from a state on your business’s behalf and must be located within that state. (Note: If you have a family member, friend or business colleague located within the state you can use them as your agent; otherwise there are a number of national registered/resident agent services.)
  4. Some states require additional registrations of your company when you apply for your authority to transact business. Make sure to read the information on the state’s web site thoroughly before proceeding.

13 thoughts on “Authority to Transact Business”

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