For any owner, trying to determine if their new business meets the standard for âdoing businessâ? in a particular state can prove confusing. Generally, if a business is engaged in transactions that are intrastate in nature, the entity is âdoing businessâ? in a state. The state then has the power to require the business to obtain permission (or register) before conducting activities inside its boundaries. Most states require that business entities engage in at least a minimum level of activity prior to registering their businesses with that state.
Each state provides its own guidelines for determining if a company is conducting business in their state. In Utah, a greater level of business activity is required for purposes of business registration than for service of process and for taxation than for business registration. Additionally, a greater level of activity is required for the purpose of requiring the registration of a foreign partnership than a foreign corporation. For example, if you are a foreign corporation and hold one meeting a year within Utah, you would not meet Utahâs standards of conducting business within Utah.
The Utah Code Annotated details transactions that, when taken by themselves, do not constitute âdoing businessâ? for purposes of business registration. The following activities do not constitute âdoing businessâ? for profit corporations and limited partnerships:
- participating in litigation;
- conducting internal affairs;
- keeping banks accounts;
- having offices for the transfer and management of corporate securities;
- effectuating sales through independent contractors;
- procuring orders which require acceptance outside of Utah;
- creating, securing or collecting on its own debt;
- owning property;
- being involved in interstate commerce;
- performing an isolated transaction; and
- obtaining conditional sales contracts or debts, either in or outside of Utah, secured by property in Utah.
Like most states, the Utah Division of Corporations and Commercial Code will examine each application based on its own merits and circumstances to make a determination regarding âdoing businessâ?. For more information, regarding Utahâs requirements, Contact https://www.incparadise.net at 888-284-3821« Return to all articles