Foreign Qualification Fundamentals: Legal Triggers, Risks, and Recent Case Law

Helena: Hello, everyone, and welcome to today's webinar, "Foreign Qualification Fundamentals: Legal Triggers, Risks, and Recent Case Law." My name is Helena Ledic, and I'm an associate general counsel with CSC.

So with that, joining me today are Mike Maxwell and Alyssa Frank from Potter Anderson. And I will turn it over to them to introduce themselves. And with that, let's welcome Mike and Alyssa.

Mike: Thanks, Helena. And good morning, everyone. So my name is Mike Maxwell. I'm a partner with the Wilmington, Delaware firm of Potter Anderson & Corroon. And joining me today is my partner and colleague, Alyssa Frank.

So today we're going to be discussing foreign qualification of business entities. And as we progress with the discussion, we're going to unpack some basic terminology, including words I just used, "foreign" and "qualification." But before we get to that, let's let Helena walk us through our agenda today.

Helena: Sure. Here's our agenda, everybody. As we just did our introductions, now then we'll end up jumping into the corporate activities that generally do not require qualification and those that generally do require qualification. We're going to hear some of the case law developments from Mike and Alyssa. We'll talk then about how corporations qualify, cure, and terminate those qualifications, the consequences that can happen out there for failing to qualify, including, spoiler alert, possible criminal misdemeanors. Then we'll talk a little bit about other regulations of foreign entities. And then conclusion and Q&A. And of course, if you have any questions, feel free to put them into the Q&A widget over there so that we can take a look at those.

And with that, I think what we will do now is we're going to turn things over to Mike to get us started with the substance.

Mike: Right. Thanks, Helena. And just as a reminder, so Alyssa and I, we are Delaware attorneys, and so our experience generally involves and focuses on Delaware law issues. And so that being the case, we're going to use examples from Delaware law to illustrate the general concepts that may apply across jurisdictions. But bear in mind, as we see here on the slide, that the presentation is intended to provide an overview of the foreign qualification process, including when to qualify, why qualification is necessary, how to qualify, and what happens if an entity should be qualified but is not.

The overview does not relate to any specific state. And each situation should be evaluated based on the particular facts and circumstances of the entity's business and the applicable state laws. So in other words, each state has its own rules when it comes to foreign qualification. And needless to say, it's always important first to check the relevant statutes in any given state. Fortunately, those laws are conveniently described in the Qualification Handbook published by CSC. So if you're not familiar with the handbook or don't have a copy, you're missing a valuable resource. If you have questions about how to obtain one, I'm sure someone from CSC will be happy to provide answers.

So with that as a preface, the first question we'll consider this morning is why attorneys, paralegals, and business decision-makers need to be aware of qualifying to do business in a foreign jurisdiction. So most of us understand that a company, whether it's a corporation, an LLC, a partnership, or maybe some other form of business organization, in many, if not most cases, is a legal entity, typically created under laws of one particular state. That's what we'll call its home state. And this is the prototype company on which we'll concentrate today. We're presupposing an entity formed under the laws of a U.S. state, meaning we're not addressing any non-U.S. entities or entities existing under federal law, such as a national bank.

So the company exists because the laws of its state of formation grant the privilege of formation and enable the entity to conduct its business. So as long as the company is properly formed and conducting business wholly within its state of formation, the company should not be subject to regulation by other states. But in the modern economy, as we all know, a company rarely limits its operations to its home state. So before a company conducts any business outside its state of formation, it needs to determine whether its proposed business activities will require the company to qualify under any foreign state's laws.

Now, as I said at the outset, that we have some basic terminology to unpack. So we're going to address business entity qualification in a foreign state. Let's focus now on the last two words, "foreign" and "state." Foreign means other than the business entity's state of incorporation or formation. So, in other words, foreign means not the home state. And the term "state," as used in today's discussion, means one of the 50 states. And as I mentioned, we're not covering non-U.S. law here. We're not covering municipal or county laws. So foreign state, as we're using the term today, refers to the 49 states, other than the home state.

So qualification statutes stem from a variety of factors. Among them, each state's desire to subject companies conducting business within the state to the jurisdiction of that state's court system, so that its courts can render valid judgments against the company in the event that a lawsuit is initiated against the company in that state.

The assessment of foreign qualification requirements involves a 50-state analysis, and determinations whether a company is "doing business" in a particular state requires reference to those varied state laws. So in those laws, doing business is often defined, as we see here on the slides, in the negative. So it lists activities that alone are insufficient to require qualification in a foreign jurisdiction, and these are termed as "exceptions to doing business." So examples of Delaware statutes include the DGCL § 373 and under the LLC Act § 18-912. And we're going to touch on those provisions a little bit later in this course and in this discussion.

But we should note at this point that qualification laws are not exclusive. Other state laws may apply to foreign entities, such as licensure statutes, substantive regulatory schemes, and tax laws. So in this program, we're not addressing all aspects of an entity's conducting business outside of its home state, and specifically we're not speaking to licensure, regulatory, or tax issues.

So a business entity is formed or incorporated or otherwise organized under the laws of a single state, often the state of Delaware. But as noted, many entities conduct business in multiple states, and regulation of business activity varies state by state. So if a business is formed in Delaware, for example, and is wishing to do business in the state of Florida, it needs to qualify in the state of Florida. This is foreign qualification.

"Qualification" is the last basic term that we should define for purposes of our discussion today. So in this context, qualification largely equates to registration. So what we're talking about here is a formal step to place a company on the record so to speak. And again, while the term "foreign qualification" might evoke the notion of an entity from another country satisfying some substantive standards, really what we're referring to here has nothing to do with foreign companies, but really everything to do with a domestic company that's conducting business activity in multiple U.S. states and taking the required ministerial steps to make registration or get on the record.

So all states have enacted laws requiring foreign entities doing business in a state to qualify. And Alyssa is going to walk us through and speak about why states want entities to qualify to do business. Alyssa?

Alyssa: Yeah. So there are many reasons why a state might want a so-called foreign company to register to do business. Usually, the entity is going to have to file an annual or semiannual report, and it's going to have to provide a registered agent for service of process within the state. So this is dual benefits for the state in terms of collecting filing fees and also providing business to its in-state registered agents.

States also want to protect their citizens and their local businesses. So when you're requiring a business to qualify to do business in a state, the state can then gather information about the business and the nature of the business and where it's being operated. Another benefit, it can also provide information for the state to be able to evaluate tax and other reporting or licensing requirements. And in particular, the state may want to ensure that a foreign business is subject to the same sorts of licensing requirements that a local business is so that they're not providing an unfair advantage to the out-of-state company.

Mike: Great. Thanks, Alyssa. So those are all legitimate state interests, and there are others. But this doesn't mean that states have unlimited authority when it comes to business regulation. So the United States Constitution insulates interstate commerce from state regulation. States are entitled to regulate activity to the extent it occurs within state boundaries. So that's the fundamental distinction that implicates state regulation.

So I'll note, however, that the federal government is not out there actively enforcing the Constitution. There's no dedicated constitutional enforcement department within the federal government. So states, on the other hand, do actively enforce their business laws. And primarily the reasons for that, generally speaking, as we've heard a little bit, come down to a state's interest in protecting its constituents and also generating revenue.

So Alyssa, maybe you want to talk now about what types of activity will require a company to qualify to do business in a state.

Alyssa: Sure. So, as you noted earlier, the first thing a company should do is get a copy of CSC's Handbook because that handbook examines questions like these and it also offers examples, like case examples to help legal professionals and business decision-makers begin to understand whether a particular company needs to qualify in a foreign state where it's doing business. Another thing that we recommend is to review the qualification statute in each applicable foreign state. And we note that that is also included in the CSC Qualification Handbook. We can provide some general advice on these statutes today, but truly it's just not a substitute for going to the actual language of the statute.

So with that said, there are many qualification statutes that define "doing business" in the negative. And what that means is that when defining "doing business," the statutes provide a list of activities that by themselves are insufficient to require a company to qualify in that foreign jurisdiction. And these listed activities are normally referred to as exceptions to doing business.

For example, in Delaware, Delaware defines which activities do not constitute doing business in each of its business entity statutes. If a company is engaging in activities in Delaware that are not included in Delaware's exceptions to doing business, then that company must qualify to do business in Delaware or risk penalties for failing to do so. The potential penalties for failing to qualify are going to be discussed later in this presentation. But depending on the state, those penalties can include being barred from enforcing contracts or bringing a lawsuit in the state, along with possible monetary penalties. And in some states, there's even individual director liability.

We should note that if a company engages in activities in a particular foreign state that are considered exceptions to doing business, and as such it doesn't have to qualify to do business in that state, that doesn't mean that the company is not subject to personal jurisdiction or taxation in the state. The company may be subject to personal jurisdiction or taxation in a state by performing activities that are insufficient to cause the company to need to qualify to do business in that state. So it's important to keep in mind the other contexts in which a company's transaction of business in a particular state may have consequences, such as jurisdiction and taxation. And we're going to talk about some case law developments with respect to personal jurisdiction later on in this presentation.

So one last thing to note on this point, there may be exceptions to the qualification rules for particular types of businesses or industries. And for example, in Delaware, there's an exception for out-of-state insurance companies. Insurance companies are not required to qualify to do business in Delaware with the Secretary of State. However, they are subject to separate rules under other laws, like Delaware's Insurance Code.

So it's important, again, to keep in mind regardless of whether a company is required to qualify to do business in a foreign state, there could be other licenses or permits or regulatory issues that a company may need to comply with in order to do business in a particular state.

Mike: Yeah, definitely important to keep that in mind. So thanks, Alyssa. All right. So now we're going to move into types of activities that may distinguish between a company being considered to do business in another state or not.

So a company could be subject to negative consequences, including penalties, if it transacts business in a foreign state without first qualifying to do business there. But, as Alyssa mentioned, not all corporate activities require a company to qualify. So the question of whether a company is doing business for qualification purposes is really determined on a case-by-case and state-by-state basis.

One generally recognized definition of doing business in a state is "regular, repeated, and continuous business contacts of a local nature." So, of course, different courts can and they do interpret and apply this definition and other applicable definitions differently. And as you're going to hear multiple times from us, for that reason, a case-by-case and case-specific factual evaluation of the activities of the company has to be made.

The "doing business" evaluation is really quite fact intensive. So the first step in the assessment requires identifying the applicable jurisdiction and the relevant statutory provisions, including exceptions. And so this initial step requires an understanding of whether there are different statutes to consider depending on the type of entity at issue. So for example, in Delaware, a foreign LLC is subject to a qualification statute different than the one that's applicable to a foreign corporation. And I mentioned those statutes earlier. And we're going to talk a little bit more about those later on in the presentation as well.

So once the governing statutes and the exceptions have been identified, then the next step is really to review the relevant case law to understand how the courts have interpreted and applied the applicable provisions and the exceptions. So generally speaking, the judicial decisions usually involve one or two factual scenarios.

The most frequent scenario involves a plaintiff company trying to litigate in a foreign state in which it is not qualified to do business. In this scenario, the defendant typically attempts to prevent the suit by arguing that under applicable foreign state law, the plaintiff is barred from accessing the foreign state's courts because the plaintiff's activities constitute doing business and the plaintiff has failed to qualify. Now we'll talk more a little bit later about this sort of litigation bar as a consequence for non-qualification.

The next frequent scenario that we see involves the non-qualified company as the defendant attempting to avoid suit in the foreign state. So the defendant usually is going to argue that it cannot be sued in the foreign state because it is not or was not doing business there.

So in both scenarios, the non-qualifying company attempts to demonstrate that its activities in the foreign state do not actually rise to the level of "doing business in the state." So a court resolving this issue is generally going to analyze the relevant statutes to determine whether a company's activities require qualification. As I mentioned, it really is a fact-intensive analysis. So accordingly, a client ordinarily is going to be well served by consulting experience counsel and others who can help it navigate this question of whether it's doing business and evaluating that concept.

So as we previously mentioned, there's a number of corporate activities that typically do not require qualification. These are also known as exceptions to doing business or safe harbors. So Alyssa, maybe you can spend a little time reviewing for us some of these exceptions to doing business that typically appear in state qualification statutes.

Alyssa: Sure. So there are a number of general exceptions that are common across state statutes. And again, you do have to keep in mind that these are being discussed today just very generally. And it's crucial to look at an individual state's statute for that state's specific exceptions.

But with that said, the first exception deals with litigation. A typical provision is going to say that a company may maintain, defend, or settle any proceeding in the state without first qualifying to do business there. So if a company's only activity in the state is to commence a lawsuit, then the company generally is not going to need to qualify to do business in that state.

The next exception is that a company may hold board of directors meetings and carry on certain internal corporate activities in a foreign state without having to qualify to do business there. And additionally, merely maintaining a bank account in a foreign state typically does not require qualification to do business. Another common exception is that a company can maintain offices or agencies for the transfer of the company's own stock or securities without having to qualify to do business.

Another one is that a company generally is not transacting business for qualification purposes if it sells goods in a foreign state through independent contractors, but only so long as the sales transactions maintain interstate characteristics. Additionally, soliciting or obtaining orders through mail, employees, agents, or other channels in a given state will not trigger the qualification requirement, generally speaking, provided that the orders require acceptance outside of that state before they become contracts.

The next exception listed here typically is invoked by banks that create mortgages and then foreclose on the property secured by that mortgage. The states which have adopted these types of exceptions have agreed that creating mortgages and indebtedness and enforcing mortgages and security interests in property securing such indebtedness do not require the bank or the company seeking to collect on the debt to qualify in the jurisdiction where the property is located. And a somewhat related exception involves merely owning real or personal property in a foreign state. Although many states have adopted this exception, few state courts have interpreted it, and so that makes it difficult to draw general conclusions about the corporate activities that might realistically fall under its protection.

Moving on to exception nine, conducting an isolated transaction that is complete within 30 days and that is not one in the course of repeated transactions of a like nature generally does not constitute doing business for qualification purposes. It should be fairly simple to determine whether a company has complied with the statutory time limit in this exception. But it might be much more complicated to determine whether a company's activities constitute an "isolated transaction." And the answer to that question can vary from state to state, and it will be important to analyze the case law of the particular state at issue to determine how that state's courts interpret the isolated transaction exemption. As a general matter, it's important to understand that a single act or transaction can be more than an isolated transaction if it indicates a willingness or intent to conduct other business in the state. So the key issue here is whether the activity is sporadic and isolated, such that it does not constitute carrying out the ordinary affairs of the company.

The next general exception is for interstate commerce, and that's a concept that Mike briefly touched on a few minutes ago. The commerce clause of the United States Constitution prohibits states from regulating interstate commerce. States can only regulate intrastate commerce, meaning commerce within that state. So, as a consequence, many states have adopted the exemption of transacting business in interstate commerce. And we do want to note that the interstate commerce exception will apply even in those states that have not specifically codified it because the U.S. Constitution overrides state law. So if a company's activity within the state is merely incidental to interstate commerce, the company will not trigger that state's qualification requirement. However, if the activity becomes routinely localized within a particular state, then the company most likely is going to be required to qualify to do business there.

And finally, the last exception that we want to note is the exception for companies that are responding to state-declared emergencies. Around half of U.S. states have enacted legislative exceptions to their qualification rules for foreign companies that transact business or services in a state when there's been a state disaster or a state declared emergency. And I think a few more states have introduced similar bills that we have to monitor the progress and status of those.

But much of those can be attributed to a model business act that was adopted by the National Conference of State Legislatures in 2014. It's called the Facilitating Business Rapid Response to State Declared Disasters Act of 2014. And the idea behind this model act is to provide states with model legislative language to waive qualification requirements for companies that are involved in rapid response to state declared emergencies. And just like some examples of that would be if there are earthquakes or tornadoes, man-made disasters like chemical spills, this allows companies that do the remediation, rescue, things like that to be able to come in and essentially they're operating their business in that state to help with the emergency, but they're not subject to the qualification requirements.

Mike, I'll turn it back over to you.

Mike: Great. Thanks, Alyssa. All right. So one additional thing to remember just regarding these general exceptions to doing business is that the exceptions we're talking about are generalizations. And again, you're going to hear that from us a number of different times. But each state's statutes may have exceptions that are different from those that we've discussed here.

So, for example, as we discussed earlier, that the Delaware General Corporation Law, the DGCL, provides an exception to qualification for an insurance company doing business in Delaware. So the type of entity you are dealing with is often going to dictate which statute a company will need to review for the exceptions. As we mentioned, a foreign LLC engaging in activities in Delaware would look to the relevant provisions of the Delaware LLC Act. And an out-of-state limited partnership is going to look likewise to the relevant provisions of the Delaware Limited Partnership Act. All right. So just again keeping that in mind as we go throughout this because really it's going to be on a state-by-state basis and then even an entity-by-entity basis.

All right. So moving to slide 13 here, let's talk about maybe what doing business means on a general level and the types of activities and conduct that constitute doing business. Alyssa, do you want to take us through that?

Alyssa: Yeah, thank you. So there are certain types of activities or actions that are typically going to trigger a finding of doing business in a state. And as an example, if you have a physical presence in a state and you're holding yourself out as doing business there, such as this is kind of an archaic example, listing in a phone book or other business directory, or more likely these days a website showing an address in that state. If you advertise in that state, you're likely going to be considered to be doing business in that state. And if you're considering whether you should register in a particular state, you should consider the scope of your business activities there, such as whether you have a physical location, employees, you take meetings with customers regularly in that state, or if your business generates significant revenues in the state on an ongoing basis.

Mike: Great. Thanks, Alyssa. So we have activities conducted in a foreign state that are regular, systemic, extensive, and continuous. These are the kind that can trigger a qualification requirement. So as you might imagine, and as we've discussed already, this area of the law is fact sensitive, and it requires a fact-intensive analysis. Many corporate acts are going to fall into a gray area, as a result, between those that obviously require qualification and maybe those that do not.

So this is a spot where the CSC Qualification Handbook is very helpful. I've found it very helpful in my practice because it delves into activities that are likely to require qualification. So on this slide here on slide 14, it's not exhaustive, but it is representative of the kinds of activities that typically require qualification. And these activities include accounting, advertising, banking, construction, sales, and third-party sales. So again, generalizations, but these are some good generalizations and representative of the kinds of activities that may require qualification and a good starting point.

So ultimately determining whether a company is doing business in a state is going to include an analysis that takes into account the totality of the circumstances. So in other words, if a company engages in multiple activities that on a one-off or even two-off basis would otherwise be exempt, the cumulative effect of those activities could result in a finding that the company is doing business in the state.

So as one hypothetical that we have here on the slides, having a sales rep alone might not be enough, even if they're an employee, and having warehoused goods in a third-party facility may be not enough on its own. But the two of those things together may cumulatively be enough. So you really need to focus on the cumulative effect as well when you're looking at these exceptions and exemptions and think about the totality of the circumstances.

All right. So Alyssa is now going to touch on a few examples that we had listed on the previous slide of these general areas where it might be a good starting point for qualification analysis. Alyssa?

Alyssa: Yeah. Thanks, Mike. So the first example is accounting. And this is something that is discussed and covered in CSC's 50-State Guide to Qualification. Many states have enacted licensing statutes requiring out-of-state certified public accounting companies to obtain temporary permits before they can practice in their state. Although the CSC book doesn't discuss the licensing requirements, accounting companies should note that they must obtain these temporary permits before conducting accounting activities in those states. Courts are often going to consider the state's licensing laws as one of several factors when determining whether a foreign accounting company is doing business in the state for qualification purposes.

And the next example is banking. Most states have general qualification statutes that identify the maintenance of a bank account as a business activity that does not require qualification. There are a few states that don't provide a bank account exception, and there the question becomes whether maintenance of a bank account triggers the obligation to qualify as a foreign company. So, for example, the Delaware qualification statute is silent as to whether maintenance of a bank account in Delaware requires qualification. At least one commentator has suggested though that the maintenance of a Delaware bank account alone or even together with some other minor activity, such as advertising in a Delaware newspaper, probably would not by themselves be sufficient to constitute doing business in Delaware.

I'll turn it back over to you, Mike.

Mike: Great. Thanks, Alyssa. All right. So now we're going to touch briefly here on a few recent case law developments relating to personal jurisdiction, which can be affected by qualifying in a foreign state. So just to set the table here, personal jurisdiction is a legal concept that refers to a court's authority over each party involved in a particular lawsuit. It includes the court's power to render an enforceable decision against those parties.

So one type of personal jurisdiction is general jurisdiction. If a court of a particular state has general jurisdiction over a party, that means that the court can render a decision against that party relating to any issue, regardless of whether the lawsuit is related to the party's contact with the state. On the other hand, if a court has only specific personal jurisdiction over a party, the court may only decide a case that arises out of or relates to the party's specific contacts with the state.

So with that as background, we'll run through some recent case law, and Alyssa is going to talk about a relatively recent Supreme Court decision that's already proving to have a big impact on a company's decision whether to qualify to do business in foreign states.

But first, we're going to kind of go back in time to the U.S. Supreme Court 2014 case, Daimler AG v. Bauman. So personal jurisdiction can be established if a foreign company has a principal place of business within the state where the suit is brought or if the company is incorporated in that state. But if neither of those elements is present, then in order to find personal jurisdiction, the courts must determine whether that company's affiliations with the state are so continuous and systemic as to render it essentially at home in that state. So in other words, the contexts have to establish that the type of close relationship with the state where the suit is filed as being incorporated there or owning a principal place of business in that state.

So state courts have reacted to the Daimler decision in different ways. One example is the Delaware Supreme Court's 2016 decision in the Genuine Parts case, which interpreted state law in light of the Daimler case. So in Genuine Parts, the court held that merely registering to do business in the state and having a registered agent appointed to receive service of process does not subject a foreign corporation to general personal jurisdiction in Delaware for claims that are unrelated to Delaware. The court said in that case that qualification in Delaware does not amount to a broad consent to personal jurisdiction in any cause of action, and that any use of the service of process provision for registered foreign corporations must involve an exercise of personal jurisdiction that's consistent with the due process clause of the 14th Amendment.

Then a few years ago, in 2021, the U.S. Supreme Court unanimously held, in the Ford Motor Company v. Montana, 8th Judicial District Court, that when a company serves a market for a product in a state and that product causes injury in the state to one of its residents, the state's courts have specific personal jurisdiction to hear the case. So the main legal issue in this decision was whether state courts had specific personal jurisdiction over a corporate defendant that has purposefully availed itself of doing business in a forum state but has not directly caused the plaintiff's injuries in that state through its conduct in the state.

So in the Ford Motor Company decision, it decided two companion cases, each of which involved the plaintiff resident of the forum state who was injured in the forum state by an allegedly faulty Ford vehicle. Now Ford did not design or manufacture the vehicle in the forum state, nor did it sell the vehicle to a dealer in the forum state. So in short, in each case, Ford had nothing to do with the allegedly faulty Ford vehicle's presence in the forum state as each plaintiff had bought its vehicle in a secondary market through a private sale.

So despite these facts, the Supreme Court found that the forum state properly had jurisdiction, and the court parsed whether each plaintiff's claim had arisen out of or related to Ford's activities in the forum state. And they held that a claim can relate to the defendant's activities even without a causal relationship. So, interestingly, the court found that Ford by advertising, maintaining retail dealerships, and providing parts and services for vehicles in the forum state created a market in the state for its cars. Additionally, each plaintiff's harm in the forum state was caused by a Ford vehicle that was of the same type as Ford marketed in the state, which resulted in the court's finding of relation to the creation of the market and then triggered a finding of specific jurisdiction.

So this is the first case since the 1980s that saw plaintiffs prevail in a personal jurisdiction case before the Supreme Court. Now that said, the Ford case is a fairly narrow decision that may not apply if a plaintiff is not a resident of the forum state, or if a defendant doesn't market the exact type of product in the forum state that caused the alleged harm.

This concept is supported by recent Delaware case law, called Varsity Brands Holding Company LLC v. Arch Insurance Company. In February of 2025, the Delaware Superior Court ruled that two of the insurance company defendants were not subject to personal jurisdiction in Delaware for due process reasons. The court noted that while the insurers were licensed to sell insurance and conduct business in Delaware, this was not enough to establish personal jurisdiction. This is because they had negotiated and executed the insurance policies outside of Delaware and the underlying claims did not occur in Delaware.

So on the Delaware law side, in the Genuine Parts case, we have a good example of why it's important to understand the consequences of both doing and qualifying to do business in a foreign jurisdiction. As we've seen, one consequence is being subject to personal jurisdiction in that state, specific personal jurisdiction. Also, and as we've mentioned quite a few times, we're going to continue to beat this drum, people need to keep in mind that different states' legislatures and courts may respond differently to precedent. So it's always important to review the relevant statutes for your particular jurisdiction as well as the relevant case law for a particular jurisdiction.

All right. With that overview in mind, I did mention that Alyssa is going to discuss a fairly recent Supreme Court case. So we'll turn it to Alyssa to discuss the Mallory case.

Alyssa: Yep. Thanks, Mike. So many of you may have already heard of this case, Mallory v. Norfolk Southern Railway, and we've talked about it in a couple of our past presentations on foreign qualifications. So the case deals with a Pennsylvania statute that expressly states that by registering to do business in Pennsylvania, an out-of-state company automatically consents to general jurisdiction.

Mallory was filed in Philadelphia's Court of Common Pleas. The plaintiff was a Virginia resident, who was a former employee of Norfolk Southern. He sued the railroad company, which is a Virginia corporation, with claims that he developed cancer from on-the-job exposure to asbestos and other toxic chemicals. Despite both the plaintiff and the railroad being based in Virginia, the plaintiff claimed the Pennsylvania courts had personal jurisdiction over the defendant under the Pennsylvania statute that I just mentioned.

The defendant successfully contested personal jurisdiction at both the trial court and the Pennsylvania Supreme Court levels on the grounds that establishing general personal jurisdiction through business qualification is a violation of the defendant's due process rights under the 14th Amendment of the U.S. Constitution. And the plaintiff then appealed the case all the way up to the U.S. Supreme Court.

In June 2023, the U.S. Supreme Court, in a five to four decision, found in favor of the plaintiff. The court ruled that so-called consent by registration jurisdiction doesn't violate the due process clause of the 14th Amendment, and that general personal jurisdiction can be established just by qualifying to do business in a state. The court ultimately found that its 1917 decision, quite a call back there, in Pennsylvania Fire Insurance Company of Philadelphia v. Gold Issue Mining and Milling Co. was controlling. And there, it was a Missouri statute, similar to the one at hand in Mallory, that required that out-of-state insurance companies desiring to transact business in the state of Missouri agreed to appoint a state official to serve as the company's agent for service of process and accept service on that official as valid in any suit.

In holding the exercise of jurisdiction over the defendant was valid, the U.S. Supreme Court found the Missouri statute was consistent with the Constitution and with long-settled legal tradition, which permitted suits against individuals in any jurisdiction where they could be found. The court did not see fit to treat a fictitious corporate person any differently. So of particular import to the court was that the defendant in this case, Norfolk Southern had agreed to accept, or sorry, my apologies, this is in the 1917 case, had agreed to accept service of process in Missouri on any suit as a condition of doing business there.

So bringing it back forward to present day, as of June 2026, Pennsylvania is still the only state with a statute that expressly provides for such consent by registration jurisdiction. Although we do also want to flag that Georgia, Minnesota, Kansas, and Iowa all have statutes that have been interpreted to allow general jurisdiction based on a registration to do business.

And then we also do just want to quickly mention Illinois, which enacted legislation in 2025 for targeted consent to jurisdiction by registration. But that Illinois statute is limited to toxic torts, and it's not a broad, explicit general jurisdiction consent like the Pennsylvania statute. And the distinction that I just want to draw here is that, like I said, Pennsylvania has this express provision where you read the statute and it sort of like hits you over the head that if you're qualifying and registering to do business here, this is what you're consenting to. And the other states that I mentioned, Georgia, Minnesota, Kansas, and Iowa, it's more that there have been some case law that have interpreted their statutes to a similar conclusion, but it's not really an express statement in the statute.

So since Mallory was decided in '23, there have been a number of other cases seeking to use Mallory's holding as a basis for deriving personal jurisdiction. We're going to discuss a couple of those here.

In Bancredito Holding Corporation v. Driven Administration Services LLC, this is a January 2024 decision, the defendant, a Puerto Rican LLC, was registered to do business in North Carolina, and it appointed a registered agent in the state solely because it had one employee who lived and worked remotely for the company in North Carolina. And this Puerto Rican LLC had no other connection to North Carolina. The plaintiff sought to use this business registration and registered agent appointment, citing Mallory, as the basis for the United States District Court for the Eastern District of North Carolina to have personal jurisdiction over the defendant. The court there noted that North Carolina's business registration statute does not contain the same express consent to jurisdiction language that the Pennsylvania statute at issue in Mallory contains. It held that a fair reading of Mallory did not permit the North Carolina court to conclude that the defendant impliedly consented to general jurisdiction in North Carolina solely by registering to do business there and appointing an in-state agent.

And another thing we want to mention, if you joined us for this webinar last year, we talked about a September 2023 decision by the U.S. Court of Appeals for the Second Circuit in Fuld v. Palestine Liberation Organization. And in that case, the judgment was vacated against the Palestine Liberation Organization and the Palestinian authority in favor of U.S. citizens who were injured in a terror attack and I think multiple terror attacks in Israel. The plaintiffs had relied on a federal law, called the Promoting Security and Justice for Victims of Terrorism Act, which provides for deemed consent to jurisdiction. But the Second Circuit held that this provision violated the due process clause because it didn't establish valid consent, and it was distinguishing Mallory v. Norfolk Southern Railway Company on the grounds that the defendants had not accepted in-forum benefits. And so the plaintiffs appealed.

In a new development since our last webinar, the Supreme Court of the United States unanimously reversed the Second Circuit, in June of 2025, holding that Congress may constitutionally condition certain benefits, such as maintaining offices or engaging in specified activities in the United States, on a foreign entity's consent to personal jurisdiction. And it remanded the case back down to the Second Circuit for further proceedings.

So now, in March of 2026, the second circuit implemented the Supreme Court holding in Fuld, and I think there were a couple of related anti-terrorism act cases. And the Second Circuit concluded that the PLO and the Palestinian Authority's continued activities falling within the Promoting Security and Justice for Victims of Terrorism Act triggered the statutory consent to jurisdiction. So, as a result, the Second Circuit revived claims that were previously dismissed for lack of personal jurisdiction.

I just think there the takeaway is about thinking about what the entity or company is doing in a state. Again, here it was maintaining offices. There might be certain other specified activities, and you have to just keep that in mind when you're considering what your company is doing in a particular foreign state.

And one other thing we wanted to sort of briefly touch on, in Texas, there is a State Supreme Court and an appellate court that declined to infer general jurisdiction from foreign registration absent explicit statutory consent, like what you'd see in the Pennsylvania statute for example. So there are a couple cases here.

In Certain Underwriters at Lloyd's, London v. Henry Vogt Machine Company, the Texas Supreme Court considered whether a foreign corporation's registration to do business in Texas constituted consent to general personal jurisdiction after Mallory. And it held that registration alone does not equal consent to general jurisdiction in Texas.

And then, in State v. Yelp, Inc., the court considered whether online platforms registering to do business in Texas are subject to general jurisdiction based solely on registration, and likewise held that registration alone does not give rise to general jurisdiction.

So taken together, these decisions underscore a broader doctrinal shift building on Mallory. They confirm that consent-based jurisdiction, whether through a state's foreign registration statutes or federal conditional benefit regimes, remains a constitutionally viable path to general jurisdiction, even over foreign or quasi-sovereign defendants, so long as the consent is tied to a cognizable benefit or privilege.

And at the same time, the 2026 ruling suggests that courts will really scrutinize the nexus between the conferred benefit and the asserted jurisdiction. And it sort of leaves open future limits on how far legislatures may go in deeming consent through regulatory schemes. The general consensus seems to be that general jurisdiction by registration exists only in the narrow category of states that explicitly condition business registration on consent. All other jurisdictions treat registration as administrative compliance that's governed by Daimler and not as a jurisdictional waiver.

With that, I will turn it back over to you, Mike.

Mike: Great. Thanks, Alyssa. All right. It seems that the fact that the Pennsylvania statute required a foreign corporation's consent to jurisdiction as the condition for doing business there really was critical to the holding of Mallory. And again, just another reminder, folks, that there's no substitute for careful reading of the applicable state's qualification statute. And as Alyssa also mentioned, there's case law interpreting certain statutes along those lines and so really looking at the case law applicable to your jurisdiction as well.

All right. With that, we're going to talk a little bit about the intersection of qualification to do business with internet and e-commerce operations. So as everyone knows, the internet has revolutionized the way companies transact business, their ability to transact business across state boundaries. That's whether it's buying and selling products and services or conducting virtual meetings and other business operations or just communicating. The sheer volume of the business activity that takes place over the internet on any given days really is tremendous and sometimes mind-boggling. So it's no surprise that the internet activity has gotten lots of attention in the courtroom, and corporate decision-makers are facing lots of legal issues involving their e-commerce and other internet types of activities.

So a company's gateway to the internet is its website. So one significant legal issue regarding websites is whether a company's use of a website constitutes doing business in a state outside the one in which either the company is located or the website was created. So a company needs to determine whether maintaining or owning the website means that it has to qualify to do business in any state where either the website can be accessed or customers use the products or services offered on the site.

So there's relatively little statutory law and case law addressing the question of whether owning or operating a website constitutes doing business for qualification purposes. That said, there's a number of cases that address a similar issue, which is whether a company's internet activities in a foreign state constitute doing business sufficient to justify the courts of that state exercising personal jurisdiction over the company. So exploring the issue of jurisdiction with regard to websites can be useful when we're trying to determine whether companies need to qualify to do business based on its website activity.

So in broad terms, the important distinction between transacting any business for purposes of this personal jurisdiction question and doing business for purposes of the qualification statutes is that a greater amount of business activity generally is required in order to compel a foreign company to qualify to do business with a state, more than the amount of activity that's generally needed to merely subject it to personal jurisdiction. So what this means in practice is that it is easier for a company engaging in activities in a foreign state to satisfy the minimum contacts test for jurisdictional purposes than it is to satisfy the doing business test maybe for qualification purposes under a qualification statute.

So logically then, if a company's contacts with a foreign state are not sufficient to justify the exercise of personal jurisdiction, the court should find that those same contacts will not trigger a company's duty to qualify in that state. Alyssa is going to give us some more detail on this point. Alyssa?

Alyssa: Yeah. Thanks, Mike. One thing I just want to mention is that Mike and I have done this presentation together for like multiple years, and from year to year I always forget how to pronounce Daimler. I think I said Dimeler, but it's Daimler. And I guess in German it's a different pronunciation, but we won't get into that.

But anyway, so the 2014 U.S. Supreme Court decision in Daimler made a huge impact on judicial opinions regarding whether personal jurisdiction is created by internet activity or websites. Although Daimler was not an internet case, it explores the outer limits of personal jurisdiction in cases implicating global matters, including whether or not personal jurisdiction can be based on a website that can be accessed around the world. And the analysis is going to have to determine when minimum contacts grant a court personal jurisdiction.

Before the Daimler decision, many courts applied a sliding scale test that was tailored to internet activities to determine the level or types of activities that constituted minimum contacts for general jurisdiction purposes. At one end of the scale, you had passive websites, which alone do not generate sufficient contacts with a foreign state necessary to establish personal jurisdiction. A passive website is only used to post information. It doesn't actively solicit orders for goods or services or support other commercial activities.

And then at the other end of the scale were active websites, which generate sufficient business over the internet to establish personal jurisdiction. An active website serves as a gateway for conducting business over the internet between the website owner and residents of a particular state.

An interactive website fell in the center of the scale, and courts determined whether to exercise personal jurisdiction over the interactive website owner on a case-by-case basis. Interactive websites are hybrid sites that contain elements of both passive and active websites. So an interactive website may allow users, for example, to exchange information with the website creator, to order products, make reservations, and conduct other business, often with a credit card. The owner of an interactive website will not necessarily be subject to the personal jurisdiction of a foreign state. But to make this determination, most courts are going to look at the level of interactivity and commercial nature of the exchange of information that occurs on that website, as well as whether the website owner targeted or aimed its efforts at the foreign state.

There's a 2021 United States District Court for the Western District of Pennsylvania decision that denied a defendant's motion to dismiss on the grounds that the court lacked personal jurisdiction over the defendant. And this case includes some helpful guidance. The decision stated that although the defendant, a California apparel business, operated a website and social media platforms that were capable of doing business with a Pennsylvania customer, such as the plaintiff, the mere fact that these online platforms tried to appeal to a customer base outside of California without specifically referring to Pennsylvania in any particular way was insufficient to establish a base for exercising personal jurisdiction. However, the court denied the defendant's motion to dismiss without prejudice in order to allow the plaintiff to conduct jurisdictional discovery.

There are some additional factors the courts will consider in evaluating jurisdictional issues for websites that Mike is going to talk about.

Mike: Great. Thanks, Alyssa. The post-Daimler, I'm going to pronounce it right now that Alyssa's mentioned that, courts have applied a three-part effects test in determining whether specific personal jurisdiction can be established. So really this test requires a showing that the defendant, one, committed an intentional act, which was, two, expressly aimed at the foreign state, and three caused harm, the brunt of which is suffered and which the defendant knows is likely to be suffered in the foreign state.

So certain courts have combined both the sliding scale and the effects test in the personal jurisdiction analysis. In fact, some federal courts have stated that a determination of personal jurisdiction based solely on the effects test is rare, and as a result of the Daimler decision, courts are now using the effects test as only one of the considerations in ascertaining whether the contacts were continuous and systematic enough to render the foreign company essentially at home in the foreign state. So on a similar vein, the status of the website as described under the sliding scale test that is, as Alyssa discussed, active, passive, or interactive is still used by many courts. But it's only one factor of many in making personal jurisdiction determinations.

In a case, the Briskin v. Shopify, which is a 2025 Ninth Circuit en banc decision, the court held that an e-commerce platform's use of cookies, tracking tools, and data collection tied to people in the state where the lawsuit was filed can constitute purposeful direction sufficient for specific personal jurisdiction. And that's even without a physical presence in the foreign state. So post-Mallory, the decision really reflects how courts have continued to separate statutory consent-based jurisdiction, like that was the case in Mallory, from traditional minimum contacts analysis, with this Briskin case expanding the latter in the context of modern, data-driven online commerce. So the case I think really signals that jurisdiction may increasingly depend on targeted digital tracking and monetization of user data, rather than just mere website accessibility.

There's minimum or minimal case law on the question of whether email sent to a party in another state can single-handedly establish jurisdiction. A few cases that have been decided on the subject suggest that it can. So in one Connecticut case, for example, the court found that it had jurisdiction over a Massachusetts company in a resident's slip and fall action, where the injury occurred at the company's Massachusetts location as the company engaged in conduct that included emailing and soliciting business by reaching out to Connecticut residents and seeking their membership.

In 2019, the New York County Commercial Division found that defendants were subject to New York jurisdiction under its so-called single act statute, which provides that a New York court can exercise personal jurisdiction over any foreign entity that transacts business within the state or contracts anywhere to supply goods or services in the state of New York. So in this case, the plaintiff, a New York company, had entered into a letter of intent with the defendant, an Illinois company, and filed for breach of contract in New York. The defendant challenged personal jurisdiction, but the New York court found that the defendant was subject to jurisdiction because of it engaging in voluminous electronic communications consisting of emails and phone calls with the New York plaintiff.

Now the defendant in this case argued that it was physically located in Illinois for every email, phone call, or text. But here the court instead focused on the business that was being transacted, rather than the defendant's physical location. And it found that the Illinois company had projected itself into the state of New York in order to create an ongoing contractual relationship with the New York plaintiff.

So ultimately, however, the issue of email as a basis for personal jurisdiction, it's still an evolving area of law without a ton of case law. So it's still something that there's some ambiguity.

All right. Now we're going to come down off the mountaintop and descend from consideration of some of these theoretical issues to more of the practical. We're going to talk nuts and bolts.

As noted previously, qualification involves a formal registration. So Helena, from CSC's perspective, can you give us maybe a practical handle on how companies qualify to do business in a foreign jurisdiction?

Helena: Absolutely, Mike. And in the interest of time, I'm probably going to go a little bit quickly through this. But what I do want to point out is that CSC will do a name check for any single qualification out there. Sometimes that means that we have to go to the state's website. Sometimes we actually have to call the state directly.

Things that might affect name availability are similar names, prohibited words, or restricted words. So one thing that's really important to know is that prohibited and restricted words are different. Restricted words generally usually means it can be used, but you have to provide additional supporting documents, or maybe additional approvals will be needed.

The other thing that you're going to need to do is gather your supporting evidence, such as certificate of good standing and existence and compliance. If you happen to have a restricted word, maybe include a copy of that from the original home state that you have over there. If you need professional licenses or approvals from any of the regulatory bodies, such as banking or division, it's best to gather those ahead of time.

You also want to figure out who do you want to appoint and have as your registered agent. States may have different options, where it can be individuals or entities. Some states may actually allow the actual entity to be their own registered agent. Others will require a third party. And, of course, CSC offers agent representation services domestically and internationally and also for those special agencies that we have out there.

We can make sure that you also comply with publication or recording requirements if that is applicable. So that's governed by state statute. That's something that CSC can also help you out with.

Documents, of course, also need to be prepared along with all of this. Perhaps a law firm, the individual might be doing it. As I mentioned, a law firm such as Potter Anderson or maybe a service company such as CSC. You might have to fill out extensive questions on some of that paperwork. Some states it's relatively easy. There's a flat fee in Hawaii. But to be able to qualify in Illinois, the fee is actually fairly complicated. There's a lot of calculations that go into that.

Annual report filings, taxes, fees, all of that has to be part of that subsequent thing that you have to stay in compliance with. States like California require an annual report to be filed in 90 days or else there will be additional fees. If you're in Alaska, you will need to have a state business license prior to the start of doing business.

And, of course, we've been mentioning this several times, but there may be differences between corporations and LLCs and for that matter with an LP. So they have all got different reporting tax structures. It's best to get some legal advice or advice from a CPA on how to navigate how to best choose what type of entity that you want to have. CSC can't help you with that, but a firm like Potter Anderson can. So with that, back to you, Mike.

Mike: Thanks, Helena. And just to point out, for example, in the DGCL, the Delaware General Corporation Law, § 371 tells you what you need to do, these steps that Helena just walked through for a Delaware corporation, for example. The LLC Act, under § 18-902, talks about the application and registration required for a Delaware LLC. So as we've been mentioning, it's important to look at the statutes, but the statutes are pretty helpful on laying out what's required for each state to give effect to the registration or to make that application.

Helena, do you want to talk about the ramifications and consequences?

Helena: Sure. If we go over here, if we're jumping ahead a little bit here, with the ramifications that we have over here is that you've got the legal perspective that can happen over here, the curing failures, and then the terminating the qualifications. You've got both the voluntary, the involuntary, and then surviving the service of process. So with respect to all of this, the consequences we have been talking about is that if you fail to do this qualification and all of this, we'll get into it a little bit more, will be your penalties and things like that. But you're going to also end up being subject to jurisdiction in the state, the annual fees, and all of that. So what we're going to do is we're going to have now Alyssa take it over to talk about how to cure some of these failures.

Alyssa: Thanks, Helena. So yeah, a company may find that it's doing business in a foreign state without a certificate of authority, and as a result, then it may be subject to certain statutory penalties. And state laws generally vary on whether and how a company can cure the defect of not being registered, qualified.

Generally, the company can file an application for qualification and pay all required fees as well as any penalties that are associated with its prior failure to qualify and its late filing. And in such a case, the effect of the filing is generally going to be retroactive. However, in certain situations and in certain states the failure to qualify may prevent a company from maintaining a lawsuit in that state. And so for that reason, a company should not opt out of qualifying in a state, generally speaking, on the assumption that it can just cure the failure to qualify in the future.

And Helena, if we have time, do you want to discuss some examples that you've seen with respect to curing failures of a company to qualify?

Helena: So we've got over here, let me see. Oh, I'm going to just jump back here for a second. So we've got a few different examples. And again, in the interest of time, we'll kind of cut things down. But for example, in Tennessee, you've got 60-day grace periods. If you lose that 60 days that are in there, and if you go and if you exceed the 12 months afterwards, then there are things like that you need separate tax clearances and things like that, that would be in there.

There's, for example, in Missouri, you've got to file your first annual report in 60 days. If you don't do that, you're administratively revoked, which means that you're involuntarily terminated and then you have to reinstate. And then, Connecticut can also be involuntary terminations that are in there.

So there's a lot of detail that goes into this, and it's best to get that advice, from someone like Potter Anderson, of if you fail to qualify, what are some of those penalties that can happen? So I'm going to give it back to you, Alyssa, so that we can get into and stay with some of the more content here.

Alyssa: Sure. Okay. So a lot of companies may fail to pay attention to foreign qualification, and it could be intentional, it could be unintentional. From the unintentional side, it might just not occur to anyone to qualify to do business in a certain state. But some might not want to qualify because they want to avoid all the filing fees. They might want to avoid having to pay additional taxes, avoid certain reporting requirements, or needing to appoint an agent for service of process and all the related and associated fees and expenses.

Mike, back to you.

Mike: Yeah. So, Alyssa, let's say you've got an obligation to qualify, but you don't do it. What are the consequences of that? It seems like many states impose penalties or other consequences where a foreign company must qualify but does not do so. And I think these measures typically are designed to encourage compliance. Alyssa, can you give us an idea of the types of penalties states use to enforce their foreign qualification laws?

Alyssa: Sure. So the main penalty is to prevent foreign companies from maintaining lawsuits in a foreign state's courts. Although some states also provide for monetary penalties.

Denial of access to courts precludes unqualified foreign companies from maintaining lawsuits within their borders until they obtain certificates of authority or whatever that state issues for a business registering to do business there. So for example, if an unqualified company files suit, the defendant may move to dismiss on the ground that the company lacks standing to bring suit. Some states permit a court to stay a proceeding where a foreign company hasn't qualified, rather than dismissing the case entirely until the company has qualified. And then, in contrast, some states' penalty provisions don't give an unqualified foreign company any opportunity to cure a qualification deficiency after having filed a lawsuit.

Most states, though, expressly permit unqualified companies to defend themselves when they are brought to court. And many state courts interpret these provisions to also allow unqualified foreign companies to file counterclaims against the opposing party in the same lawsuit.

Additionally, most states also include a provision stating that a failure to qualify before doing business in a foreign jurisdiction does not impair the validity of its corporate acts.

So finally, most states include monetary penalty provisions for a company's failure to comply with qualification requirements. And many of these states do not impose a substantial civil penalty for failure to qualify, but they instead require payment of back fees and taxes plus a penalty for lateness. Other states may impose either a lump sum penalty or include the same provision of payment for all fees and taxes plus an additional monetary penalty ranging from $10 per day that the company failed to qualify to a penalty not to exceed $5,000. And for example, in § 378 of the Delaware General Corporation Law, a foreign corporation that's doing business in Delaware without complying with Delaware's qualification requirements is subject to fines of $200 to $500 for each offense.

And Helena, can you please provide any examples that you've encountered of penalties for companies that have failed to qualify?

Helena: So you can see this over here from the chart that we have on the screen. This is from our Customer Service professionals. You can see just how big these penalties can end up being over here.

For example, in Florida, 20 times. Georgia is only about three times. But I've actually heard from our Customer Service team that there was one state, and this involved things such as annual reports and things like that, where a company had to write a check that was in the seven figures to get themselves reinstated. So it can be really dramatic. And we've seen a couple of things come through in the chat with people where they've said they got hit with a $1,200 penalty in one state is what someone said.

Mike: Yeah. And I think we've touched on a lot of these points already. As we mentioned, some states impose monetary or criminal penalties on companies' directors, officers, or agents if they transact business on behalf of an unqualified foreign corporation. You see some examples here in Delaware, for example, where an agent may be fined $100 to $500 for each offense. Alyssa, why don't we talk about some of the other consequences as well?

Alyssa: Yep, sure. So beyond the monetary penalties that we've already discussed, some other consequences of failure to qualify can include tax penalties for other taxes, such as state income tax or a use tax that a company would have been subject to had they qualified, but because they weren't qualified, they never paid.

Additionally, failure to qualify could appear in a contract dispute where, for example, the other side is looking for anything to throw at you. So if you provided reps and warranties that the company is in material compliance with all obligations, but, in reality, the company has failed to register or qualify in certain states where it's doing business, this could result in a breach of contract. And there may be similar issues with respect to compliance with SEC and other disclosure requirements.

Mike: Great. All right. So we are getting close to our hour and 15 minute conclusion here. So as we end our journey together, I just want to again repeat this reminder that other types of laws and regulations need to be considered when a company is looking to do business in a foreign jurisdiction. We've mentioned licensure, insurance. Alyssa, do you want to just briefly touch on a few of these points?

Alyssa: Yep, perfect.

Mike: To take us through this last point.

Alyssa: Yep. So the first one to touch on are laws relating to obtaining particular licenses and permits. As previously noted, the qualification to do business in a foreign state doesn't mean that a company is free to engage in whatever business it wants in the foreign state. Certain businesses and industries, as we've previously flagged, require special licenses and permits. And these can be at the state, the county, or even at a city level. And there are also various industries that may require a license in a particular jurisdiction, like the practice of law, for example, or medicine, as previously noted, engaging in accounting activities, or the insurance business.

Companies may have other regulatory issues to deal with as well. Another example here is that banks must qualify under the Delaware banking laws before they can conduct banking business in Delaware. This qualification process is different from qualification requirements under the general "doing business" qualification, and it requires much more disclosure about the company and its business.

And finally, many states may also require a company to register with the Department of Revenue or the state's equivalent agency for tax purposes.