Topic: Qualification of Foreign Business Corporation ... - IACA

Qualification of Foreign Business Corporation – 2011 –July–27 

Topic: 

Question by: 

Jurisdiction: 

Qualification of Foreign Business Corporation 

Maureen E. Ewing 

Rhode Island 

Date: 27 July 2011 

Jurisdiction 

Question(s) 

Q1: Does your state have any pre-qualifying 

statutory requirement that either the 

corporation or the individuals (stockholders) 

have to be approved/licensed by a local 

Board of License before they can qualify by 

filing a Certificate of Authority? 

Q2: Does your state have a statute that 

would require the foreign to meet all 

the requirements that a domestic would 

have to in order for the entity to 

operate a medical practice? 

Q3: Or, in the alternative, does your 

office not involve itself in the process and 

just allow the local state agency to police 

and enforce the medical licensing laws 

after the fact? 

Manitoba 

Corporations 

Canada 

Alabama 

Federally, Canada does not. 

There is no federal statute of this 

type. 

Corporations Canada is responsible for 

incorporating businesses that choose to 

incorporate federally, rather than 

provincially or territorially, in Canada. 

We issue certificates of incorporation 

and certificates of major changes, but 

we do not register or certify the authority 

of medical professionals to do business 

within Canada. Licensing of medical 

services is a responsibility of the 

provinces and territories. 

Alaska 

Page 1 of 13


Jurisdiction 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 







Arizona requires the following: 

10-2245. Application for authority to 

transact business 

The application of a foreign professional 

corporation for authority to transact 

business in this state shall contain the 

information prescribed in section 10-1503 

and shall include a statement that at least 

one-half of its shareholders who are 

entitled to vote for the election of directors, 

at least one-half of its directors and its 

president, if any, are licensed in one or 

more states to render a professional 

service described in its articles of 

incorporation and be accompanied by a 

statement from the licensing authority 

indicating that at least one of its 

shareholders or employees is licensed in 

this state to render that professional 

service. 

Colorado does not screen for this when 

filing a statement of foreign entity authority. 

Question(s) 











Colorado uses option #3. 



Jurisdiction 

Question(s) 

















District of 

Columbia 

Florida 

Georgia 

In the District of Columbia we have 

Professional Corporation Act that has been 

on the books since early 1970s. 

A statute exists that requires licensure but 

it is not stated that it is a prerequisite to 

qualification. We do not screen for 

it. Licensure is in another agency. 

We have two requirements for any 

foreign entities that provide 

“professional service – includes 7 

professions” in the District: 

1-affirm that employee who will render 

professional service will be duly 

licensed in DC before doing so; 

2-adopt professional qualifier (PC or 

chartered) if state of domicile does 

not require one solely for the purpose 

of doing business in DC. 

I do not know. 

Aside from those two requirements our 

sister division – Occupation and 

Professional Licensing – manages most 

of professional licenses with the 

exception of DC Bar and DOH who 

handle attorneys and doctors 

respectively. 

We do not involve ourselves in the 

licensure requirements upon 

qualification. We leave that to the 

agency who enforces the requirements. 

Hawaii 

Idaho 

Hawaii does not have a provision in 

our laws for a foreign professional 

corporation. 

Illinois 

Indiana 

Iowa 



Jurisdiction 

Question(s) 

















Kansas 

Kentucky 

In Kansas at least one shareholder has to 

be registered in this state by a licensing 

authority. Since the Doctor is the only 

shareholder he would have to be licensed 

in Kansas which would allow it to be a 

professional corporation but no longer 

foreign. 

Kansas Statute 17-2712 (d) A professional 

corporation or foreign professional 

corporation in which at least one 

shareholder is authorized by a licensing 

authority of this state to render in this state 

a professional service permitted by the 

articles of incorporation of the corporation 

shall be deemed a qualified person for 

purposes of this section. 

If [the doctor] didn’t want to be 

licensed in Kansas [the doctor] would 

have to file as a foreign corporation 

not as a professional corporation. 

The licensing issue is left up to the 

Board of Healing Arts, we ask for a copy 

of the license as part of the business 

filing. 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 



Jurisdiction 

Minnesota 

Mississippi 







Minnesota has a Professional Firms Act, 

which requires all owners to be 

professionals but defines the term as 

follows: “Subd. 17. Professional. 

"Professional" means a natural person who 

is licensed by the laws of the state of 

Minnesota or similar laws of another state 

to furnish one or more of the categories of 

professional services listed in subdivision 

19. Professional includes a natural person 

who is licensed or otherwise authorized to 

practice law under the laws of a foreign 

nation.” Minn. Stat. sec. 319B.02, subd. 

17. 

Question(s) 






A foreign firm seeking to provide 

professional services in Minnesota 

may therefore be owned entirely by 

foreign-licensed professionals, if the 

firm properly elects to be bound by 

the Professional Firms Act. That 

undertaking is made in a filing with 

our Secretary of State. 319B.04, 

subd 2 (“To elect to become a foreign 

professional firm and be authorized to 

furnish professional services 

according to sections 319B.01 to 

319B.12, a foreign firm must in its 

certificate of authority or statement of 

foreign qualification ….”). 








Jurisdiction 

Question(s) 

















Missouri 

Montana 

Nebraska 

Missouri’s requirements under 356.231 is 

as follows: 

2. A foreign professional corporation shall 

be entitled to procure from the secretary of 

state a certificate of authority to transact 

business in this state only if: 

(1) The name of the corporation meets the 

requirements of sections 356.011 to 

356.261; 

(2) The corporation is organized only for 

purposes for which a professional 

corporation organized under sections 

356.011 to 356.261 may be organized; and 

(3) All the shareholders, at least a majority 

of the directors and all the officers other 

than the secretary and treasurer of the 

corporation are qualified persons with 

respect to the corporation. 

In Montana, the following statutes [see 

Additional Comments below] apply to 

Professional Corporations transacting 

business in Montana. A Montana 

corporation must file articles of 

incorporation […] with the Secretary of 

State. 

The foreign professional would be 

required to meet the requirements of 

a domestic, with the exception that we 

would not require the corporation to 

submit a certification from the 

Missouri certifying board; the foreign 

professional corporation submits an 

affidavit that (3) above is met. They 

also must submit the certificate of 

good standing from the home state, 

and the fee is $155. 

[A] foreign corporation must file the 

application for certificate of authority 

with the Secretary of State. 

The registration with the licensing 

authority is between the entity and the 

licensing authority. The Secretary of 

State’s office does not ensure the entity 

files its organizing documents with the 

licensing authority. 

Montana also registers professional 

limited liability companies. 

Nevada 



Jurisdiction 

New Hampshire 

New Jersey 

New Mexico 

New York 







Question(s) 






NH’s statute regarding the admission 

of foreign professional corporations. 

294-A:25 Admission of Foreign 

Professional Corporations. – 

I. A foreign professional corporation 

shall be entitled to procure a 

certificate of authority to transact 

business in this state only if: 

(a) The name of the corporation 

meets the requirements of this 

chapter; 

(b) The corporation is organized only 

for purposes for which a professional 

corporation organized under this 

chapter may be organized; and 

(c) All the shareholders, and such of 

the directors and officers as are 

required under RSA 294-A:20 are 

qualified persons with respect to the 

corporation. 

II. No foreign professional corporation 

shall be required to obtain a certificate 

of authority to transact business in 

this state unless it maintains an office 

in this state for the conduct of 

business or professional practice. 








Jurisdiction 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 







Question(s) 






This is covered under N.C.G.S. 55B, the Professional Corporation Act. 

and the appropriate statute follows [see Additional Comments below]: 






Ohio is Choice #3, leaving it up to the 

licensing authority. 

Oregon is Choice #3. The licensing 

requirements for a professional entity is 

up to the licensing authority. 



Jurisdiction 

Virginia 

Washington 

West Virginia 







We have no statutory or other requirement 

for the foreign PC or PLLC, or their 

shareholders, members, etc. to register 

with the licensing authority before 

obtaining a certificate of authority to 

transact business in Virginia. [To the right] 

is the relevant statute for corporations: 

Question(s) 











§13.1-544.2. Certificate of authority for foreign professional corporations. 

A. Notwithstanding any other provision of this chapter, a foreign professional 

corporation, organized under the laws of a jurisdiction other than the 

Commonwealth of Virginia to perform a professional service of the type defined 

in subsection A of § 13.1-543, may apply for and obtain a certificate of authority 

to render such professional services in Virginia on the following terms and 

conditions: 

1. Only stockholders and employees licensed or otherwise legally qualified by 

this Commonwealth may perform the professional service in Virginia. 

2. The professional corporation must meet every requirement of this chapter 

except the requirement that its stockholders be licensed to perform the 

professional service in this Commonwealth. 

3. The powers of any foreign professional corporation admitted under this section 

shall not exceed the powers permitted to domestic professional corporations 

under this chapter. 

B. In order to qualify, a foreign professional corporation shall make application to 

the Commission as provided in § 13.1-759 and shall make such application for 

and secure a certificate of authority as may be required by § 13.1-549; and, in 

addition, shall be required to set forth the name and address of each stockholder 

of the corporation who will be providing the professional service in this 

Commonwealth and whether such stockholder is licensed, or otherwise legally 

qualified, to perform the professional service in Virginia. 

#3 on your list describes Washington. 

We do not recognize "employees" 

or stockholders or verify if the 

professional is licensed. We will verify 

that a WA Professional Service Entity's 

(Incorporator/Executor) is an individual 

in the same profession as the entity 

being formed. 



Jurisdiction 

Wisconsin 

Wyoming 







Question(s) 











Additional comments: 

Montana’s statute: 

35-4-111. Application of the Montana Business Corporation Act. The Montana Business Corporation Act applies to professional corporations, 

domestic and foreign, except to the extent its provisions are inconsistent with this chapter. 

35-4-205. Purposes of corporation. Professional corporations may be organized under this chapter only for the purpose of rendering 

professional services and services ancillary thereto within a single profession, except that a professional corporation may be incorporated for the 

purpose of rendering professional services within two or more professions and for any purpose or purposes for which corporations may be 

organized under the Montana Business Corporation Act to the extent that such combination of professional purposes or professional and business 

purposes is permitted by the licensing laws and rules of this state applicable to such professions. 

35-4-207. Directors and officers. At least one-half of the combined directors and officers of a professional corporation, other than the secretary 

and the treasurer, must be qualified persons with respect to the corporation. 

35-4-208. Filing of articles with licensing authority. No professional corporation, domestic or foreign, may begin to render professional services 

in this state until it has filed a copy of its articles of incorporation with each licensing authority having jurisdiction of a type of professional service 

described in its articles of incorporation. Nothing in this chapter restricts or limits the authority or duty of a licensing authority with respect to natural 

persons rendering a professional service within the jurisdiction of the licensing authority or any law or rule pertaining to standards of professional 

conduct. 

North Carolina’s statute: 

§ 55B-16. Foreign professional corporations. 



(a) A foreign professional corporation may apply for a certificate of authority to transact business in this State pursuant to the provisions of this 

Chapter and Chapter 55 of the General Statutes provided that: 

(1) The corporation obtains a certificate of registration from the appropriate licensing board or boards in this State; 

(2) With respect to each professional service practiced through the corporation in this State, at least one director and one officer shall be a 

licensee of the licensing board which regulates the profession in this State; 

(3) Each officer, employee, and agent of the corporation who will provide professional services to persons in this State shall be a licensee of the 

appropriate licensing board in this State; 

(4) The corporation shall be subject to the applicable rules and regulations adopted by, and all the disciplinary powers of, the appropriate 

licensing board or boards in this State; 

(5) The corporation's activities in this State shall be limited as provided by G.S. 55B-14; and 

(6) The application for certificate of authority, in addition to the requirements of G.S. 55-15-03, shall set forth the personal services to be 

rendered by the foreign professional corporation and the individual or individuals who will satisfy the requirements of G.S. 55B-16(a)(2) and shall 

be accompanied by a certification by the appropriate licensing board that each individual is a "licensee" as defined in G.S. 55B-2(2) and by 

additional certifications as may be required to establish that the corporation is a "foreign professional corporation" as defined in G.S. 55B-16(b). 

(b For purposes of this section, "foreign professional corporation" means a corporation for profit that: 

(1) Is incorporated under a law other than the law of this State; 

(2) Is incorporated for the purpose of rendering professional services of the type that if rendered in this State would require the obtaining of a 

license from a licensing board pursuant to the statutory provisions referred to in G.S. 55B-2(6); and 

(3) Has as its shareholders only individuals who: 

a. Qualify to hold shares of a corporation organized under this Chapter; 

b. Are licensed to provide professional services as defined in G.S. 55B-2(6) in a state in which the corporation is incorporated or is authorized to 

transact business, provided that such professional services are the same as the professional service rendered by the corporation; 

c. Are nonlicensed employees of a corporation rendering services of the type defined in Chapters 83A, 89A, 89C, and 89E of the General 

Statutes, provided that all such nonlicensed employees own no more than one-third of the total issued and outstanding shares of such corporation 

in the aggregate; or 



d. With respect to a professional corporation rendering services under Chapter 93 of the General Statutes, are persons who own not more than 

forty-nine percent (49%) of the stock in the professional corporation as long as: 

1. Individuals who meet the requirements of sub-subdivision a. or b. of this subdivision own and control voting stock that represents at least 

fifty-one percent (51%) of the votes entitled to be cast in the election of directors of the professional corporation; and 

2. All licensees who perform professional services on behalf of the corporation in this State comply with Chapter 93 of the General Statutes and 

the rules adopted thereunder. 

(b1) With respect to a professional corporation rendering services as defined in Chapters 83A, 89A, 89C, and 89E of the General Statutes, an 

employee retirement plan qualified under section 401 of the Internal Revenue Code of 1986, as amended (or any successor section), is deemed 

for purposes of this section to be an individual licensee if at least one trustee of the plan is a licensee and all other trustees are licensees or are 

individuals who are licensed under the laws of a state in which the corporation maintains an office to perform at least one of the professional 

services, as defined in Chapter 83A, 89A, 89C, or 89E of the General Statutes, rendered by the corporation. 

(c) A foreign professional corporation with a valid certificate of authority has the same but no greater rights and privileges as, and is subject to 

the same duties, restrictions, penalties, and liabilities now or later imposed on, a domestic professional corporation of like character, except that 

the provisions of G.S. 55B-6 and G.S. 55B-7 do not apply. (1995, c. 351, s. 18; 1997-485, s. 23; 1999-440, s. 2.) 

Full text of email: 

Good morning, 

In Rhode Island, we have been faced with the following scenario with a foreign entity and were wondering if a similar situation has 

popped up in your state and how you have dealt with it at the filings stage, if at all: 

A Foreign Corporation (with the stockholder a licensed physician in the foreign state and not in RI) has filed for a Certificate of 

Authority within our State. The Foreign will have RI licensed doctors as “employees” of the corporation but not stockholders. If said 

corporation was a RI domestic corporation, the stockholder physician would have to be a RI licensed physician . 

The questions is: 

1. Does your state have any pre-qualifying statutory requirement that either the corporation or the individuals (stockholders) have 

to be approved/licensed by a local Board of License before they can qualify by filing a Certificate of Authority? 

2. Does your state have a statute that would require the foreign to meet all the requirements that a domestic would have to in 

order for the entity to operate a medical practice? 



3. Or, in the alternative, does your office not involve itself in the process and just allow the local state agency to police and 

enforce the medical licensing laws after the fact? 

Your time is most appreciated. Thank you! 

Maureen 

Maureen E. Ewing 

Director of Division of Business Services 

Office of the Secretary of State A. Ralph Mollis 

148 W. River St. Providence, RI 02904-2615 

Tel. 401-222-3040 Fax. 401-222-1309 mewing@sos.ri.gov

Topic: Qualification of Foreign Business Corporation ... - IACA

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