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Only a handful of states require businesses to obtain a Certificate of Authority as a prerequisite for agency licensure. Still, many of them expect foreign entities to register with the Secretary of State before they begin transacting business. While the definition of “doing business” varies slightly from state to state, if you solicit, negotiate, contract, sell or receive commissions from insurance transactions, you may need to register.
Again, while we cannot advise you whether they need to register, our corporate compliance experts routinely secure Certificates of Authority and establish tax accounts in all U.S. jurisdictions.
Secretary of State’s Office (SOS)
Forms, fees, and procedures for SOS registrations can vary depending on the state and the legal structure of the business entity. Our experts complete the appropriate filings and submit them on your behalf. We also secure any required supporting documents such as Certificates of Good Standing and Articles of Incorporation or Formation or partnership agreements.
Some states require additional filings such as Initial Annual or Biennial Returns or public notices of the intent to transact business. Again, our compliance experts will notify you upfront about such requirements and then act promptly to execute them.
In the past, Secretary of State’s Offices often did not actively pursue non-registered businesses. Improvements in technology and increased communication between jurisdictions, however, mean an increasing number of investigations in recent years. If a state determines that you have transacted business without a business registration, they can assess fines for each transaction going back to the first transaction ever completed there.
Department of Revenue (DOR)
While the creation of a state tax account is usually a part of the SOS business registration, there are some jurisdictions that require a separate application process. Additionally, in some states, certain types of filings can trigger the creation of a tax account – even for a business that has not formerly registered with the SOS’s Office.
Your business’ structure plays a key role in determining whether you need to register with the DOR, as well as what forms you need to file and what supporting documentation you must provide. This may include initial Foreign Corporation Tax or Corporate Franchise Tax filings.
If you use a third-party provider, such as ReSource Pro, to manage your initial registration or your ongoing tax filings, you may need to provide a limited Power of Attorney. This form authorizes us to access your tax account information.
Verification of Registration Status
It’s all too common for owners or in-house compliance teams to be uncertain about where their entity is registered. As part of an SOS/DOR Compliance Review, our experts check with these regulators in each state where your insurance business holds or has held an insurance license. They determine if the business is registered, the status of that registration, and what compliance tasks (if any) need to be completed to bring it back into good standing.
ReSource Pro’s compliance experts can complete past-due annual/biennial returns, past-due franchise/foreign entity tax filings, Certificate of Authority amendments, Director & Officer Updates, etc. as needed. Once the business is “in good standing,” they can withdraw or dissolve any registrations you no longer need.