What is foreign qualification?
Foreign qualification is a process that allows you to incorporate your company in Delaware (for the favorable tax laws) but still do business in your home state. It’s just a quick form to fill out, but it’s a requirement that founders sometimes overlook. Gust Launch facilitates this process as part of your subscription, but most states charge an additional fee, which isn’t included in your subscription cost.
In the United States, corporations are incorporated at the state level. Gust Launch companies are all incorporated in the State of Delaware, meaning it’s registered to do business in Delaware. When your business establishes certain contacts or presence (through the establishment of an office, employees in the state, or other factors) in other states, those states require you to register to operate within them as well. This is "foreign qualification" or "qualifying as a foreign corporation"—“foreign” in this case doesn’t mean that you are in another country; it just means that you are incorporated in another state. Based on individual state law, you will most likely have to register with the state in which you want to do business before you can legally conduct business there.
For example, if you incorporate as a Delaware C-Corporation through Gust Launch, then you are registered (or qualified) as a domestic corporation in Delaware. If you are actually based in New York, you will need to register as a foreign corporation in New York. In this example, Delaware is your company’s domestic state of qualification and New York is your company’s foreign state of qualification, even if your company is actually located in New York and not Delaware.
Gust Launch handles the process of filing for foreign qualification for you, no matter which state you’re based in. Note that it’s called different things from state to state, such as “Application for Authority.” If you’re not sure if you need to file a foreign qualification in your state, don’t worry! We’re here to help. Just ask.