Do you own a limited liability company (LLC) created in a state other than Oklahoma, but you want to expand your business to the Sooner State? If so, you’ll need to qualify your foreign LLC in order to transact business in Oklahoma.
What is a foreign qualification and how do foreign LLCs function within the state of Oklahoma? In this guide, we’ll answer these questions and more.
Rocket Tip: If you’d rather hire an online service to handle this process for you, many of the best LLC services can handle it for you.
What Is a Foreign Qualification?
A foreign qualification enables your limited liability company to do business in the state of Oklahoma. It doesn’t matter which state you originally formed your business in ― or in other words, the state your domestic LLC is located in ― as the qualification process to register a foreign LLC in Oklahoma is the same regardless of where your domestic LLC is based.
The confusion surrounding foreign qualification usually centers on what it means to “do business” in a state outside of your primary state. This gets especially problematic considering some states don’t strictly define what it means to transact business in that state. However, Oklahoma state law does not provide a definition of “doing business” in the state.
What Qualifies as ‘Doing Business’ in Oklahoma
While there is no set definition, there are some activities that generally constitute “doing business.” Most businesses that pursue the following activities will need to form a foreign LLC in Oklahoma:
What Does NOT Qualify as ‘Doing Business’ in Oklahoma
Meanwhile, according to Oklahoma state law, the following business types do not need to obtain foreign qualification in the state:
How to Get Foreign Qualification in Oklahoma
If you want to foreign qualify your LLC in Oklahoma, you’ll need to file an Application for Registration (Foreign Limited Liability Company) with the Secretary of State’s office. This is a simple form that does not require excessive information. However, you will need to include a Certificate of Existence (sometimes referred to as a Certificate of Good Standing), which must be obtained from the proper authorities in the state in which your business was formed. The Application for Registration requires the following information:
Filing Fee: $300, with the check made payable to the “Oklahoma Secretary of State.”
What Is the Penalty for Not Getting Foreign Qualification in Oklahoma?
There is one major penalty for failing to qualify a foreign LLC in Oklahoma. If your company transacts business without registering as a foreign entity, you will not be able to file a lawsuit against a third party in an Oklahoma court. This means that individuals and businesses could fail to honor contracts with your business, and you wouldn’t be able to do anything about it legally.
Should I Hire a Business Service Provider to File My Oklahoma Foreign Qualification?
If you don’t want to handle your foreign qualification on your own, you have options. Some entrepreneurs choose to hire a lawyer to prepare and file their Certificate of Authority, which can be a good option if you’re concerned about getting the job done right. However, attorney’s fees can be quite expensive.
The other option is to hire a business service provider like Incfile or ZenBusiness to register your foreign LLC with the state of Oklahoma.
These companies can typically get your foreign qualification done for a fraction of the price of an attorney. This is our preferred route if you don’t want to go with the DIY option.
The process for getting a foreign qualification in the state of Oklahoma isn’t particularly complicated. The form is extremely simple and the entire process generally takes 2-3 weeks. In addition, Oklahoma’s rules and regulations regarding which LLCs need to foreign qualify are considerably looser than many states. Still, this isn’t a process that should be overlooked, because the penalties for not qualifying a foreign LLC in Oklahoma can be severe ― especially if you are unable to sue a third party in the event of a breach of contract.
We hope this article managed to answer your questions about obtaining an Oklahoma foreign qualification, and we wish you a prosperous business future!