How to Get Foreign Qualification in West Virginia (2022)

Do you own a limited liability company (LLC) created in a state other than West Virginia, but you want to expand your business to the Mountain State? If so, you’ll need to qualify your foreign LLC in order to transact business in West Virginia.

What is a foreign qualification and how do foreign LLCs function within the state of West Virginia? In this guide, we’ll answer these questions and more.

Guru 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 West Virginia. 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 West Virginia 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, West Virginia state law does define “doing business” in the state.

What Qualifies as ‘Doing Business’ in West Virginia

According to West Virginia State law, “a foreign corporation is deemed to be transacting business in this State if:

• The corporation makes a contract to be performed, in whole or in part, by any party thereto in this State;
• The corporation commits a tort, in whole or in part, in this State; or
• The corporation manufactures, sells, offers for sale or supplies any product in a defective condition and that product causes injury to any person or property within this State notwithstanding the fact that the corporation had no agents, servants or employees or contacts within this State at the time of the injury.”

What Does NOT Qualify as ‘Doing Business’ in West Virginia

Meanwhile, the following activities are not considered to be “doing business,” and you do not need to qualify a foreign LLC to pursue them:

• “Maintaining, defending or settling any proceeding;
• Holding meetings of the board of directors or shareholders or carrying on other activities concerning internal corporate affairs;
• Maintaining bank accounts;
• Selling through independent contractors;
• Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this State before they become contracts;
• Creating or acquiring indebtedness, mortgages and security interests in real or personal property;
• Securing or collecting debts or enforcing mortgages and security interests in property securing the debts, provided that this exemption does not include debts collected by collection agencies as defined in subdivision (b), section two [§ 47-16-2], article sixteen, chapter forty-seven of this code;
• Owning, without more, real or personal property;
• Conducting an isolated transaction that is completed within thirty days and that is not one in the course of repeated transactions of a like nature;
• Conducting affairs in interstate commerce;
• Granting funds or other gifts;
• Distributing information to its shareholders or members;
• Effecting sales through independent contractors;
• The acquisition by purchase of lands secured by mortgage or deeds;
• Physical inspection and appraisal of property in West Virginia as security for deeds of trust, or mortgages and negotiations for the purchase of loans secured by property in West Virginia;
• The management, rental, maintenance and sale or the operating, maintaining, renting or otherwise dealing with selling or disposing of property acquired under foreclosure sale or by agreement in lieu of foreclosure sale;
• Applying for withholding tax on an employee residing in the State of West Virginia who works for the foreign corporation in another state; and
• Holding all, or a portion thereof, of the outstanding stock of another corporation authorized to transact business in the State of West Virginia.”

How to Get Foreign Qualification in West Virginia

If you want to foreign qualify your LLC in West Virginia, you will need to register your business on the One Stop Business Portal. Foreign entity registration ensures that your business has a Certificate of Authority to conduct business in the state. In addition to providing standard information related to your business, you will also need to obtain a Certificate of Good Standing from your business’ state of formation. For more information on this process, consult this link.

Filing Fee: $150.

What Is the Penalty for Not Getting Foreign Qualification in West Virginia?

If your company conducts business in West Virginia before registering as a foreign entity, you will not be able to file a lawsuit against a third party in a state 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 West Virginia 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 West Virginia.

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.

Conclusion

The process for getting foreign qualification in the state of West Virginia isn’t particularly complicated compared to some other states. Foreign qualification can be filed online or by mail, and the paperwork does not require a great deal of information. However, you will need to provide a Certificate of Good Standing, which can take extra time to obtain. In addition, West Virginia’s rules and regulations regarding which LLCs need to foreign qualify are considerably looser than many states, with numerous exemptions outlined in the laws of the state. Still, this isn’t a process that should be overlooked, because the penalties for not qualifying a foreign LLC in West Virginia can be severe ― especially if someone you do business with doesn’t live up to their end of a contract and you’re unable to sue them.

We hope this article managed to answer your questions about obtaining a West Virginia foreign qualification, and we wish you a prosperous business future!