How to Qualify as a Foreign Business in Massachusetts

Every state, to some extent, requires corporations and limited liability companies (LLCs) that are doing business in their state but are registered in another state to apply or qualify as a foreign business. In Massachusetts, out-of-state businesses need to file a certificate before they start conducting their operations in the Commonwealth.

Most businesses can figure out the process on their own. But if you have questions about the law or need legal advice about the process, consider reaching out to a business attorney in Massachusetts.

(If you need guidance not specific to Massachusetts, check out our article on qualifying to do business outside your state.)

When You Have to Register to Do Business in Massachusetts

Massachusetts, like other states, requires any business that's conducting transactions within the state to register with the Secretary of State (SOS). Activities conducted within the state are considered "intrastate business" or "intrastate commerce" and do require registration. Activities conducted between states are considered "interstate business" or "interstate commerce" and don't require registration.

If you conduct transactions or operate in Massachusetts, then you'll likely need to register as either a:

• foreign corporation (if you're a corporation), or
• foreign LLC (if you're an LLC).

Massachusetts, unlike many states, does specify which activities are classified as "doing business" in the state.

The following activities do qualify as transacting business in Massachusetts and would require foreign registration:

• the ownership or leasing of real estate
• engaging in the construction, alteration, or repair of any structure, railway, or road, and
• engaging in any other activity requiring the performance of labor.

Additionally, if your company has a usual place of business in Massachusetts, then you must register as an out-of-state business. (Mass. Gen. Laws ch. 156D, § 15.01 (2023).)

When You Don't Have to Register to Do Business in Massachusetts

Generally, if you're doing intrastate business in Massachusetts, you'll need to register your company. However, there are exceptions. Massachusetts law provides a list of exempted activities that out-of-state corporations can engage in that don't require the corporation to register. The list also applies to LLCs. (Mass. Gen. Laws ch. 156C, § 48 (2023).)

The list of activities that aren't considered "doing business" in Massachusetts includes:

• maintaining, defending, or settling any proceeding
• holding shareholders' and directors' meetings (and likewise LLC member and manager meetings) and carrying on other activities concerning internal company affairs
• having a bank account
• maintaining agencies or offices for the transfer, exchange, and registration of corporate or LLC securities and maintaining trustees with respect to those securities
• selling through independent contractors
• soliciting or obtaining orders, whether by mail or through employees or agents, if the orders require acceptance outside of Massachusetts before they become contracts
• conducting an isolated transaction that's not part of repeated, similar transactions
• transacting business in interstate commerce, and
• performing activities related to banking and insurance (that's regulated under Chapters 167 and 175).

(Mass. Gen. Laws ch. 156D, § 15.01 (2023).)

If your foreign corporation or LLC participates only in these activities, it doesn't need to register with the SOS. The list isn't meant to be exhaustive and other activities might qualify as exempt.

Filing a Foreign Registration Statement to Do Business in Massachusetts

A foreign corporation or LLC must file a certificate of registration with the SOS within 10 days after it starts doing business in Massachusetts. Along with your application, you'll need to submit an authenticated certificate of good standing or certificate of existence issued by your home state.

Foreign Corporation Certificate of Registration

To register your foreign corporation, you need to file a Foreign Corporation Certificate of Registration. The application must include the following information:

• the name of your corporation or an assumed name if its registered name is unavailable for use or doesn't meet Massachusetts business name requirements
• the state where you incorporated your business
• the date of incorporation and period of duration
• the street address of your corporation's principal office
• the name and address of your Massachusetts registered agent along with the agent's written consent to be your corporation's registered agent
• your corporation's fiscal year
• a brief description of your corporation's planned business activities in Massachusetts, and
• the names and business addresses of your corporation's directors and officers.

(Mass. Gen. Laws ch. 156D, § 15.03 (2023).)

You can find this certificate along with other forms and instructions on the foreign corporation forms section of the SOS website. As of 2023, the filing fee is $400.

Foreign LLC Application for Registration

To register your foreign LLC, you need to file a Foreign LLC Application for Registration. In the application for registration, you'll need to include the following:

• the name of your LLC and, if different, the name your LLC proposes to do business under
• the state where your LLC was organized
• the date your LLC was formed
• the general character (nature) of business your LLC proposes to do in Massachusetts
• the street address of your LLC's principal office
• the name and addresses of your LLC's managers (if it has any)
• the address of your LLC's principal office in Massachusetts
• the name and address of your Massachusetts registered agent along with the agent's written consent to be your LLC's registered agent
• if your LLC has a specific date of dissolution, the latest date the LLC is to dissolve, and
• if desired, the name of anyone authorized to execute, acknowledge, deliver, and record any recordable instrument.

(Mass. Gen. Laws ch. 156C, § 48 (2023).)

You can find this certificate along with other forms and instructions in the foreign LLC information section of the SOS website. As of 2023, the filing fee is $500.

Consequences of Not Registering Your Business in Massachusetts

If your LLC or corporation does business in Massachusetts without registering, it can't initiate lawsuits in the state. Your company can, however, be sued and defend against those lawsuits.

Additionally, not being registered doesn't invalidate your LLC's or corporation's contracts or acts. So, any contracts your corporation or LLC entered into would still be enforceable regardless of whether you registered as a foreign business.

(Mass. Gen. Laws ch. 156D, § 15.02 (2023); Mass. Gen. Laws ch. 156C, § 54 (2023).)

Penalties for Foreign Corporations That Don't Register

If your foreign corporation does business in Massachusetts without first registering, then you'll be liable for various fines. Specifically, the SOS can require your corporation to pay:

• all late fees that you would've had to pay if you filed your certificate of registration
• all interest and penalties for the failure to pay the fees, and
• an additional penalty for each month or part of a month you transacted business without filing a certificate.

Your corporation isn't responsible for the monthly penalty for the first 10 days that you transacted business in the state without filing your certificate.

(Mass. Gen. Laws ch. 156D, § 15.02 (2023).)

Penalties for Foreign LLCs That Don't Register

Massachusetts law says that if your LLC doesn't register with the SOS, then it can be fined up to $500 for each year that it's not registered.

However, LLC members and managers aren't personally responsible for any of the LLC's obligations solely because the LLC didn't register.

(Mass. Gen. Laws ch. 156C, § 54 (2023).)

Additional Information About Registering Your Foreign Business

If you'd like more information on registering your foreign LLC or corporation, you can visit the SOS website. You can search or file by subject and learn about the different filing methods. You can also access other services you might need when you start to do business in Massachusetts.

You'll also be responsible for keeping up with annual filing and tax requirements just as if you registered as a domestic entity with Massachusetts. For more on maintaining your business registration, check out our article on Massachusetts LLC annual report and tax filing requirements.