Foreign Corporation Authority in New York

New York calls a corporation foreign when it was incorporated in some other state or country. That corporation keeps its home charter. Authority adds the right to do business in New York, and it lasts as long as the corporation holds its authority at home and has not surrendered it here or had it suspended or annulled (BCL 1305). The statute behind all of this is Article 13 of the Business Corporation Law.

Authority reaches any business that a corporation formed in New York may lawfully pursue, provided the corporation's home state allows it as well (BCL 1301). Its powers are the ones its home law gives it, capped at those of a domestic corporation formed for the business named in the application (BCL 1306).

BCL 1301(a) forbids doing business before authority is granted but never defines the phrase. Subdivision (b) instead lists four activities that fall outside it, wording the list so that others may qualify too. The four:

• Defending or prosecuting litigation, administrative matters or arbitration, and settling the claims involved
• Holding meetings of directors or shareholders
• Maintaining bank accounts
• Keeping an office or agency solely to transfer, exchange and register the corporation's securities, or appointing trustees or depositaries for them

Subdivision (c) is a caution: the four items do not set the standard for being served with process under this article or any other New York statute.

Where the line falls

The Department of State states that it gives no opinion on what is doing business. It has published a short opinion of counsel on the subject. In summary, the contacts that call for qualification are local rather than interstate, and they are permanent, continuous and regular. A further question is whether the activity is vital to the corporation's business or only incidental to it. Property, a New York office and employees are not named on the statutory list either way, so a corporation with those contacts is in a gray area. A New York lawyer can apply the case law to your facts. A single contract or an occasional one-off deal is the kind of contact the opinion says usually falls short.

The Department of State's form is DOS-1335-f-a, an application for authority under BCL 1304. The filing is delivered to the Division of Corporations in Albany with the fee, and the Department's instructions list no online option for it. The fee is $225, payable by check, money order or card through the Department's authorization form. Optional expedited handling adds $25 for 24 hours, $75 for the same day, or $150 for two hours. No standard processing time is published.

The signer can be an officer, a director or someone else authorized. The application sets out:

• The corporation's own name, with an alternate for New York use when that name is not available
• Where and when it was incorporated
• The purposes for which it was formed
• The New York county where its office will be (a physical office is not required)
• Who receives lawsuits for it: the Secretary of State, together with a mailing address for copies
• A registered agent, if it wants one
• A statement that it has not engaged in activity in New York beyond the four listed in BCL 1301(b), or the State Tax Commission's consent in place of that statement

The tax commission consent

That last item matters. If the corporation has already been conducting business in New York, it cannot truthfully make the statement. In that case, the Department of State instructs the corporation to call the State Tax Commission, get its consent, and send that consent in with the application. Starting early therefore adds a step before the filing can be accepted.

A certificate from home is required. BCL 1304(b) calls for a certificate by an authorized officer of the corporation's home jurisdiction that it is an existing corporation, and the Department of State specifies that it comes from the official who keeps corporate records there. In most states that is the Secretary of State, and many call it a certificate of good standing. The form also accepts a certificate of status.

New York sets an age limit of one year. The date on the certificate has to fall within the year before you file. The name and the incorporation date on the application must exactly match what the certificate shows. If the certificate is in a foreign language, a translator's sworn translation goes with it. The corporation orders the certificate from its home state, which prices it independently.

If the corporation's true name cannot be used in New York because it conflicts with a name already on file, BCL 1301(d) lets it adopt a fictitious name for New York. The fictitious name cannot contain a corporate indicator. The corporation must then use it in dealings with the Secretary of State and in business here. New York's assumed-name statute does not apply to it. The Department also charges $5 per name for a written name availability search.

Secretary of State and registered agent

Under BCL 1304, each application names the Secretary of State as the corporation's agent for process. Naming a registered agent is extra: BCL 305 says a corporation may designate one, and the agent may be a natural person who lives or has a business address in New York, or a domestic or authorized foreign corporation of any type. LLCs are not named in the statute, which is why you should ask Mainstay Filing support whether its agent fits your corporation before ordering. No office-hours rule appears. A registered agent can resign by certificate, and the designation ends 30 days after the Department files the certificate.

Every corporation with New York authority files a biennial statement every two years during the calendar month in which its application for authority was filed (BCL 408). The fee is $9. The statement identifies the chief executive officer and that person's business address, the principal executive office, the spot where the Secretary of State forwards process, and the size of the board along with its count of women. Missing it has no late fee, but New York records show the statement as past due, and a Certificate of Status will say so.

Amendments and surrender

• Amendment. A changed corporate name, a new or dropped fictitious name, or a different line of business needs an amendment to the application, filed for $60 (BCL 1308).
• Office county, agent or process address. A certificate of change handles the county of the New York office, the registered agent and the mailing address for process. It costs $30 (BCL 1309-A).
• Surrender. To leave New York, file a certificate of surrender of authority for $60. The State Tax Commission's consent to the surrender must be attached (BCL 1310). The Secretary of State remains the corporation's agent for claims based on obligations it incurred in New York before the surrender.

BCL 1312 states what follows. A foreign corporation operating in New York without authority is barred from bringing any action or special proceeding in the state. The bar lifts only once it holds authority and has paid the fees and taxes the Tax Law and related statutes impose, plus accrued penalties and interest. The bar passes to a successor in interest.

Its contracts and acts are not undone, whoever signed with it may still sue on them, and the corporation can answer any suit against it. Separately, BCL 1303 lets the attorney general sue for an order restraining an unauthorized corporation's business. No per-day fine is set out in these sections.

For a corporation chartered elsewhere, Mainstay Filing's qualification package takes on the New York filing. Mainstay Filing drafts the application, submits it to the Department of State, and lists a New York registered agent on it, at no charge for twelve months and $149 annually afterward. You supply the corporation's details and the certificate from home, which Mainstay Filing does not order. Biennial statements and taxes stay with the corporation.

Checkout lines as they stand today are on the New York foreign qualification page. For the agent without the filing, read the New York registered agent page. Mainstay Filing prepares paperwork and acts as agent; it gives no legal advice, and a gray-area question on doing business is for a New York lawyer.