corporate-law incorporation maryland delaware
Do I need to register for Foreign Qualification in my situation?
<p>I am wondering if or where I need to register for Foreign Qualification: I incorporated a company as a C-corp in Delaware. I work day-to-day and have set the official HQ of the corporation in Maryland. Currently, we don't sell any products for a price (our products are free IT). Do I need to register for Foreign Qualification in Delaware (or am I already?), or do I need to in Maryland?</p>
<p>Thanks!</p>

<p>A corporation that is incorporated in Delaware is a foreign corporation in Maryland and not Delaware. Since it sounds from the question that this corporation regularly conducts business in Maryland ("work day-to-day" and "official HQ" in Maryland), it almost certainly is required to register for foreign qualification in Maryland.</p>

<p>In Maryland, "a foreign corporation is doing business within a state when it transacts some substantial part of its ordinary business therein", <em>Chesapeake, Etc. v. Manitowoc Engineering Corp.</em>, 194 A. 2d 624 (Md. 1963), and is therefore required to qualify as a foreign corporation under Maryland Code, Corporations and Associations § 7-203. "Factors which may be taken into account include the payment of state taxes; the maintenance in the state of property, an office, telephone listings, employees, agents, inventory, research and development facilities, advertising, and bank accounts; the making of contracts; and the extent or pervasiveness of management functions including supervision and control of distributors and services for customers within the state." <em>SAS Personnel Consult. v. Pat-Pan</em>, 407 A. 2d 1139 (Md. 1979). </p>

<p>If the corporation's HQ is in Maryland, it is likely these factors all indicate that the corporation does business in Maryland and is thus required to register.</p>
