Each state requires out-of-state (foreign) businesses that to register to do business in the state if the have business operations in the state. If the prior business entity will continue to maintain ties to the prior state after moving to the new state, it may be necessary to register it in the prior state. The determining factor is whether the prior business entity will be “doing business” in the prior state.

Each state has specific definitions and thresholds for what constitutes “doing business,” and the exact application of the the rules to a specific business are often unclear. “Doing business” generally includes:

• Having a physical office or place of business in the state.
• Hiring employees in the state.
• Conducting regular meetings with clients or customers in the state.
• Engaging in significant, continuous, or substantial business activities in the state.
• Holding property, such as warehouses or retail locations, in the state.

While not conclusive, a good litmus test is whether the prior business entity will have an ongoing business connection to the prior state that is different than any other U.S. state. If so, that could indicate a substantial connection that requires registration. If the prior business entity is cutting ties to the prior state and will have no further connection to it than any other state, then it is probably “doing business” for purposes of the registration requirements. These are general guidelines only.