If you own a business that was created outside of New York, then you need to register it if you want to do business in New York. For our purposes, a “foreign” business is any business created outside of New York. That also includes businesses created in another state and other countries. There are main advantages to registering a foreign business in New York and we discussed these in prior posts including a post on the disadvantages of incorporating in New York.
Are you Transacting Business in New York?
According to New York Law, foreign businesses are required to register its business in New York it it is “transacting business” in New York. While this term is not truly defined in New York law, we can interpret that to mean that if you have a physical presence in New York, (an office, warehouse or store, for example) or have a sufficient connection (or “nexus”) with New York that would require your business to collect sales tax in the state, then you most likely must register your foreign business.
However, you are not transacting business in New York if your foreign business is defending a lawsuit, holding a meeting, or simply having a bank account within the state.
Registering your Foreign Business in New York
To register your foreign business in New York, you must file an Application for Authority with the NYS Department of State. While it is not necessary to do so, we recommend that you contact a New York attorney to handle this application for you, as there are different forms based upon what kind of foreign entity you have and, also, additional necessaries are required related to employment, contracting business with New York consumers, taxes and other compliance basics.
Should your foreign business fail to register and still does business in New York, then your business may not bring any lawsuit in a New York court, and may be liable for taxes to the State for revenue earned from doing business within New York. Additionally, fines and penalties may be imposed.
Therefore, it is advisable to register with New York State should you decide that your foreign business will be transacting business in the Empire State.