What is the foreign entity qualification

A foreign business entity is an entity formed under a statute or common law in a jurisdiction other than the state in which your corporation was originally formed. The foreign L.L.C or foreign corporation is registered with the state where you want to do business. It is also known as Out-of-state entity.

For Example: A New York limited liability company intends to operate in the state of California as well. In this situation, a foreign entity will be established in the state of New York, rather establishing a domestic limited liability company in the state of California.

The state of California entity will use the same employer identification number and it will obtain the new business licenses from the California company according to the California state guidelines.

How would the tax returns will be filed, in both the states?

• Consolidated federal tax returns will be filed with the Internal Revenue Service.
• The new York franchise return will be filed each year.
• The California franchise report will be filed each year.

Note: Find here the state filing required to maintain company in the state of New York and California