BIGUN 1,490 #1 December 16, 2007 So our CFO has determined that we need to have statutory representation in all the states we do business. His explanation is that it is required for any sales, payroll, or equipment in those states. We are incorporated in Ohio, have a finance department and in-house legal staff. I understand the need for statutory representation in other countires and have used the services of counsel in those countries. I simply don't understand the "why" behind needing to spend thousands of dollars for statutory representation in the states we do business. Can one of you legal type explain when and why SR is needed? Thanks.Nobody has time to listen; because they're desperately chasing the need of being heard. Quote Share this post Link to post Share on other sites
Gawain 0 #2 December 16, 2007 Curious how a CFO would come to that conclusion, unless the senior counsel told him about it. Of course, asking a lawyer if you need representation is like asking a dog if he's hungry.... So I try and I scream and I beg and I sigh Just to prove I'm alive, and it's alright 'Cause tonight there's a way I'll make light of my treacherous life Make light! Quote Share this post Link to post Share on other sites
Krip 2 #3 December 16, 2007 Conflict of interest One Jump Wonder Quote Share this post Link to post Share on other sites
legalart 0 #4 December 16, 2007 Not a lawyer, but my understanding is most states require that you have an agent for service of process in any state in which you do business. Quote Share this post Link to post Share on other sites
Krip 2 #5 December 16, 2007 Quote Not a lawyer, but my understanding is most states require that you have an agent for service of process in any state in which you do business. Did a goodle search One site charges $129/yr to act as a agent for service of process (fwding service when legal documents served). Wonder if national skydiving booking companies or any mail order business are required to use a service like this? Quote Share this post Link to post Share on other sites
SkyDog50 0 #6 December 16, 2007 Quote I am a lawyer, and I think you are correct! Quote Share this post Link to post Share on other sites Andy9o8 2 #7 December 17, 2007 I'd need to know what kind of company you're in, what kind of business it does in other states, whether it maintains some kind of fixed physical presence and/or conducts significant operations or has staffed offices in other states, etc. The requirement to register to do business in another state is all about the other state making sure it gets its cut of taxes. The requirement to have statutory representation in another state (a registered agent for service of legal process - for example, the CT Corporation is a popular one), is the other state ensuring that if an out-of-state company has a physical presence in the host state, it will be easy to serve the company with a lawsuit in the host state. Taken together, the host state says: "You want to conduct business here? Fine - as long as (a) you pay our state taxes, and (b) you subject yourself to easy service of process here, too." Many states require you to establish a registered agent for service of process ("statutory representation") in their state when you register to do business there. Very generally speaking, a company doesn't have to register to do business in another state just because it sells widgets that get shipped to customers in the other state. It has to register in another state if it maintains some kind of more or less fixed physical presence in the other state, and/or if it conducts significant operations in the other state. Example#1 : Suppose (hypothetical) Joe's Soup, Inc. is a Florida corporation that has its main HQ and soup factory in FL. It also has another soup factory in Kansas, a western sales office in California and couple of company-owned "Joe's Soups" stores it is test-marketing in the Seattle, WA area (all of which are staffed by Joes Soups, Inc. employees). It also ships Joe's Soups all over the country; and cans of Joe's Soup are sold in non-affiliated supermarkets in all 50 states. It also has traveling sales reps making sales calls all over the country trying to get its products placed in supermarkets. So: Joe's Soup, Inc. must register as a foreign corporation and set up statutory representation in KS, CA and WA. But (depending on state laws) it probably does not need to do so in the other 46 states in which its product is sold, or in which its traveling sales reps make calls, but where it does not otherwise maintain some kind of physical presence, or conduct more substantial operations. Example #2 - a construction contracting company whose sole office is in Nebraska, but it accepts and actively participates in months-long construction projects in several other states. Some or all of those other states might require it to register and set up statutory representation in their states. Quote Share this post Link to post Share on other sites DougH 270 #8 December 17, 2007 Yay nexus! One of the more interesting tax topics. "The restraining order says you're only allowed to touch me in freefall" =P Quote Share this post Link to post Share on other sites BIGUN 1,490 #9 December 17, 2007 We are a Disaster Response Company on contract with many of the gulf (Florida is one of my prime customers) and eastern states (and several large oil companies). If mobilized, we have to pay taxes in those states right down to the employees paying state income tax. They know how much they pay us, they know how much the employees make (Davis-Bacon) and we can be audited by the state or federal government to ensure everything is squeaky clean (we've never flunked an audit). Our mission is a civil affiars one in which we setup Mobile Base Camps, mobile showers, mobile kitchens, mobile laundries, etc. for the Fed/State emergency response workers. We are in-state for a minimum of two weeks, but usually do not exceed four weeks. Conversely, one cannot exist on disasters alone, so we also have a complete separate corporation (same employees) where we specialize in large-scale "extreme events" (i.e., the Susan G. Komen Breast Cancer walks, Microsoft picnic where we feed 58K people in 3 days... that type of thing)... But, do not have statutory representation for that corporation. Same type mission except we're not in-state for usually more than four days and follow the same rules regarding taxes, employee state income tax - everything. I was suddenly presented with an invoice for the disaster company where we had been registered in 8 states which brought up the question. I don't think legal knew anything about it (one attorney) since he's been gone on vacation. I'm waiting for our legal to get back and wiill drill down more into it, but just thought I'd see if I could learn more than the google search as to the "whys" and "whens" a company should do this in the States. Really perplexed as to, why after 30 years it suddenly became necessary and if one corp, why not the other. I think you may have answered here... Example #2 - a construction contracting company whose sole office is in Nebraska, but it accepts and actively participates in months-long construction projects in several other states. Some or all of those other states might require it to register and set up statutory representation in their states. Thank you all...Nobody has time to listen; because they're desperately chasing the need of being heard. Quote Share this post Link to post Share on other sites Join the conversation You can post now and register later. If you have an account, sign in now to post with your account. 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Andy9o8 2 #7 December 17, 2007 I'd need to know what kind of company you're in, what kind of business it does in other states, whether it maintains some kind of fixed physical presence and/or conducts significant operations or has staffed offices in other states, etc. The requirement to register to do business in another state is all about the other state making sure it gets its cut of taxes. The requirement to have statutory representation in another state (a registered agent for service of legal process - for example, the CT Corporation is a popular one), is the other state ensuring that if an out-of-state company has a physical presence in the host state, it will be easy to serve the company with a lawsuit in the host state. Taken together, the host state says: "You want to conduct business here? Fine - as long as (a) you pay our state taxes, and (b) you subject yourself to easy service of process here, too." Many states require you to establish a registered agent for service of process ("statutory representation") in their state when you register to do business there. Very generally speaking, a company doesn't have to register to do business in another state just because it sells widgets that get shipped to customers in the other state. It has to register in another state if it maintains some kind of more or less fixed physical presence in the other state, and/or if it conducts significant operations in the other state. Example#1 : Suppose (hypothetical) Joe's Soup, Inc. is a Florida corporation that has its main HQ and soup factory in FL. It also has another soup factory in Kansas, a western sales office in California and couple of company-owned "Joe's Soups" stores it is test-marketing in the Seattle, WA area (all of which are staffed by Joes Soups, Inc. employees). It also ships Joe's Soups all over the country; and cans of Joe's Soup are sold in non-affiliated supermarkets in all 50 states. It also has traveling sales reps making sales calls all over the country trying to get its products placed in supermarkets. So: Joe's Soup, Inc. must register as a foreign corporation and set up statutory representation in KS, CA and WA. But (depending on state laws) it probably does not need to do so in the other 46 states in which its product is sold, or in which its traveling sales reps make calls, but where it does not otherwise maintain some kind of physical presence, or conduct more substantial operations. Example #2 - a construction contracting company whose sole office is in Nebraska, but it accepts and actively participates in months-long construction projects in several other states. Some or all of those other states might require it to register and set up statutory representation in their states. Quote Share this post Link to post Share on other sites
DougH 270 #8 December 17, 2007 Yay nexus! One of the more interesting tax topics. "The restraining order says you're only allowed to touch me in freefall" =P Quote Share this post Link to post Share on other sites
BIGUN 1,490 #9 December 17, 2007 We are a Disaster Response Company on contract with many of the gulf (Florida is one of my prime customers) and eastern states (and several large oil companies). If mobilized, we have to pay taxes in those states right down to the employees paying state income tax. They know how much they pay us, they know how much the employees make (Davis-Bacon) and we can be audited by the state or federal government to ensure everything is squeaky clean (we've never flunked an audit). Our mission is a civil affiars one in which we setup Mobile Base Camps, mobile showers, mobile kitchens, mobile laundries, etc. for the Fed/State emergency response workers. We are in-state for a minimum of two weeks, but usually do not exceed four weeks. Conversely, one cannot exist on disasters alone, so we also have a complete separate corporation (same employees) where we specialize in large-scale "extreme events" (i.e., the Susan G. Komen Breast Cancer walks, Microsoft picnic where we feed 58K people in 3 days... that type of thing)... But, do not have statutory representation for that corporation. Same type mission except we're not in-state for usually more than four days and follow the same rules regarding taxes, employee state income tax - everything. I was suddenly presented with an invoice for the disaster company where we had been registered in 8 states which brought up the question. I don't think legal knew anything about it (one attorney) since he's been gone on vacation. I'm waiting for our legal to get back and wiill drill down more into it, but just thought I'd see if I could learn more than the google search as to the "whys" and "whens" a company should do this in the States. Really perplexed as to, why after 30 years it suddenly became necessary and if one corp, why not the other. I think you may have answered here... Example #2 - a construction contracting company whose sole office is in Nebraska, but it accepts and actively participates in months-long construction projects in several other states. Some or all of those other states might require it to register and set up statutory representation in their states. Thank you all...Nobody has time to listen; because they're desperately chasing the need of being heard. Quote Share this post Link to post Share on other sites
