Every state has its own rules for business activities that require a company to qualify and register. The 2024 CSC Guide: Doing Business Outside Your State summarizes the rules and consequences for non-compliance in each state.
Crossing state lines is easy, but for businesses, it can raise challenges. Every state has its own standards as to which activities constitute doing business within its borders and thus require qualification and registration with that state. Equally important, each state imposes its own array of consequences—on companies, officers, directors, and agents—for failure to meet those requirements.
To cross state lines without crossing any legal lines, businesses need a guide—the 2024 CSC Guide: Doing Business Outside Your State.
Critical Information You Need
The CSC guide is:
- Comprehensive—Drawn from CSC’s authoritative publication, Qualifying to Do Business in Another State: The CSC 50-State Guide to Qualification, the Guide covers all 50 states and the District of Columbia.
- Clear—The Guide’s first chart quickly summarizes the activities that each state will consider in determining whether your business must qualify and register to operate.
- Complete—A second chart summarizes the consequences of failure to comply with state requirements for firms’ business operations, officers, directors, and agents, including their ability to pursue litigation.
- Authoritative—The Guide includes statutory references to help general counsels and legal advisors dig more deeply into specific situations and requirements.
- Interactive—CSC’s Guide is complemented by an interactive website with essential information you need to operate outside your state.
- Complimentary—The 2024 CSC Guide: Doing Business Outside Your State is available for free download.
A model for states to adopt
Compliance has been made easier by the adoption in many states of the Revised Model Business Corporation Act (RMBCA). That uniform code defines 11 key activities that companies may be able to pursue without registering to do business within a particular state. In 31 states, all 11 activities are deemed exceptions to doing business, while nine other jurisdictions have adopted a substantial portion of the RMBCA’s exemptions. Even in those jurisdictions, however, state codes contain modifications. And the states that haven’t substantially embraced the RMBCA include some of the U.S.’s most significant markets. The Guide details the status in each state.
Consequences of mistakes
Failure to understand and comply with a state’s doing business rules can lead to:
- Monetary penalties
- Limits on contracting and the ability to pursue or defend litigation
- Invalidation of corporate actions
- Fines, misdemeanor charges, and even imprisonment for officers and directors
- Fines and charges for registered agents
General counsels, chief compliance officers, and legal advisors need to be aware of these consequences and to strive to ensure their organizations meet each state’s requirements. Those requirements and the potential consequences in each state are outlined, with citations, in the Guide.
Your next steps
Don’t take chances with your companies’ legal status when you cross state lines. Start by downloading the 2024 CSC Guide: Doing Business Outside Your State to become familiar with each state’s requirements. And contact CSC for more information on our comprehensive, centralized filing and compliance solutions. Let CSC take care of corporate filings and other compliance requirements, so you can focus on your company’s strategic business priorities.
