Why Corporations Need to Register to Do Business in Another State

Registering to Do Business – When and Where Should You Register Your Corporation in a State Other Than the State of Incorporation?

As corporations grow and expand, they may find it necessary to conduct business operations beyond their home state. However, conducting business in a state where a corporation is not registered can have legal and financial implications. In this article, we will explore the reasons why corporations need to register to do business in another state, including legal compliance, tax obligations, access to state courts, and maintaining a strong corporate reputation.

Complying With State Laws on Business Registration of Foreign Corporations

One of the primary reasons corporations need to register to do business in another state is to ensure legal compliance. Each state has its own set of laws and regulations governing businesses operating within its jurisdiction. By registering, corporations demonstrate their commitment to following the state’s rules and regulations, protecting themselves from potential legal issues and penalties.

Registering to Do Business Subjects the Corporation to Taxes

Registering to do business in another state also means that corporations become subject to that state’s tax requirements. This includes income taxes, sales taxes, and other state-specific taxes. By fulfilling these tax obligations, corporations avoid potential tax liabilities, penalties, and legal disputes with the state’s tax authorities.

Business Registration Provides Access to State Courts

In the event of a legal dispute arising in another state, corporations must be registered to access the state’s courts. Without proper registration, corporations may not be able to file lawsuits or defend themselves in the state’s legal system. Registering to do business ensures that corporations have the legal standing necessary to protect their rights and interests in the state’s courts.

Building Trust and Reputation in the State

Registering to do business in another state can enhance a corporation’s reputation and build trust with customers, vendors, and partners. Being registered demonstrates a commitment to compliance, professionalism, and a long-term presence in the state. This can be particularly important in industries where trust and credibility are crucial for business success.

Registration Can Helps With Expansion and Growth Opportunities

Registering to do business in another state opens up opportunities for expansion and growth. It allows corporations to establish a physical presence, hire employees, and access new markets. By expanding their geographic reach, corporations can tap into new customer bases, diversify their revenue streams, and strengthen their overall market position.

How to Register to do Business in Another State

The process of registering to do business in another state typically involves filing the necessary paperwork and paying the required fees. The specific requirements vary by state but generally include submitting a foreign qualification application, providing information about the corporation’s structure and activities, appointing a registered agent, and paying the applicable fees. It is advisable to consult with legal counsel or a business advisor familiar with the registration process in the target state to ensure compliance with all requirements.

Summarizing Foreign Corporation Business Registration

For corporations seeking to expand their operations and explore new markets, registering to do business in another state is essential. Compliance with state laws, meeting tax obligations, accessing state courts, building trust, and seizing growth opportunities are all compelling reasons to undertake the registration process. By taking these steps, corporations can navigate legal and regulatory frameworks, establish a strong presence, and position themselves for long-term success in new markets.

Unraveling Corporation Franchise Taxes in Michigan: A Comprehensive Guide

Introduction to Michigan Franchise Taxes

When it comes to running a business, understanding and fulfilling tax obligations is vital. For corporations operating in Michigan, one crucial consideration is the payment of franchise taxes. In this article, we will explore the concept of corporation franchise taxes in Michigan, their significance, calculation methods, and key factors that businesses should be aware of.

Understanding Michigan Corporation Franchise Taxes

Corporation franchise taxes are a form of tax imposed on businesses for the privilege of operating as a corporation within a specific state. These taxes are distinct from income taxes and are typically calculated based on a corporation’s assets, net worth, or capitalization. Franchise tax revenues contribute to funding state initiatives, infrastructure, and public services.

Key Aspects of Corporation Franchise Taxes in Michigan

Michigan, known for its diverse business landscape, imposes specific requirements regarding franchise taxes. To ensure compliance and avoid penalties, corporations should familiarize themselves with the following aspects:

Michigan Franchise Tax Calculation Methods

In Michigan, franchise taxes for corporations are calculated based on the corporation’s net worth or capitalization. The tax rate is determined by applying a fixed rate of 0.8% to the corporation’s taxable net worth. The taxable net worth is determined by subtracting the corporation’s liabilities from its total assets.

Alternative Calculation Method for Michigan Franchise Taxes

Michigan also offers an alternative calculation method called the capital-based tax. Under this method, the tax is calculated based on the corporation’s total capital, including issued and outstanding stock, surplus, and undivided profits. The tax rate for the capital-based method is 0.12% of the corporation’s taxable capital.

Franchise Tax Filing and Payment Deadlines for Michigan Companies

Corporations in Michigan must file an annual report, known as the Annual Statement, with the Department of Licensing and Regulatory Affairs (LARA). The report, along with the payment of franchise taxes, is due by May 15th of each year. Late filing or payment may result in penalties and interest charges.

Minimum Franchise Tax for Michigan Corporations and LLCs

Michigan imposes a minimum franchise tax on corporations, regardless of their net worth or capitalization. The minimum tax is $100. Even if a corporation’s taxable net worth or capital-based tax calculation is below this amount, it is still required to pay the minimum tax.

Exemptions from Michigan Franchise Tax Obligations

Michigan provides certain exemptions from franchise taxes for specific types of corporations. For instance, nonprofit corporations, religious organizations, and governmental entities may be exempt from franchise taxes. It is essential to review the state’s regulations and consult with tax professionals or legal experts to determine eligibility for exemptions.

Michigan Franchise Taxes Closing Thoughts

Corporation franchise taxes are an important financial obligation for businesses operating in Michigan. Understanding the calculation methods, filing and payment deadlines, and potential exemptions is crucial for corporations to ensure compliance and effectively manage their tax responsibilities. Consultation with tax professionals or legal experts well-versed in Michigan’s corporate tax laws is recommended to navigate the complexities of franchise tax calculations and filing procedures. By doing so, corporations can thrive in Michigan’s diverse business environment while fulfilling their tax obligations and contributing to the state’s growth and development.

Single Specialty Ambulatory Surgery Centers

Single Specialty Ambulatory Surgery Centers

Single Specialty Ambulatory Surgery Centers (ASCs) have gained significant popularity in recent years due to their focus on providing specialized surgical care in an outpatient setting. As these centers continue to evolve and adapt to changing healthcare landscapes, it is important to address some frequently asked questions (FAQs) surrounding their operations. In this article, we will explore the latest FAQs about single specialty ASCs and shed light on their benefits, regulations, and patient considerations.

What is a Single Specialty Ambulatory Surgery Center?

A Single Specialty ASC is a healthcare facility that specializes in providing surgical procedures within a specific medical field, such as orthopedics, ophthalmology, or gastroenterology. These centers offer a range of outpatient procedures that do not require an overnight hospital stay, providing patients with convenient and cost-effective surgical options.

What are the Benefits of Single Specialty ASCs?

Single Specialty ASCs offer several advantages for both patients and healthcare providers. They typically have specialized equipment and staff experienced in a specific medical field, allowing for streamlined processes and improved outcomes. These centers often provide a more personalized and patient-centric experience, with shorter wait times and focused care. Additionally, single specialty ASCs are known for their ability to control costs, resulting in reduced healthcare expenses for patients and payers.

How are Single Specialty ASCs Regulated?

Single Specialty ASCs are subject to strict regulatory oversight to ensure patient safety and quality of care. These centers must comply with federal, state, and local regulations, which include obtaining appropriate licenses, adhering to infection control protocols, maintaining proper documentation, and meeting specific facility and equipment standards. Accrediting organizations, such as the Accreditation Association for Ambulatory Health Care (AAAHC) or The Joint Commission, also play a vital role in ensuring compliance with rigorous quality standards.

What Types of Procedures are Performed in Single Specialty ASCs?

Single Specialty ASCs perform a wide range of procedures specific to their area of specialization. For example, an orthopedic ASC may offer procedures such as arthroscopy, joint replacements, or fracture repairs. Ophthalmology ASCs may focus on cataract surgery, laser eye procedures, or corneal transplants. Gastroenterology ASCs might perform colonoscopies, endoscopies, or other digestive system-related surgeries. These centers aim to provide efficient and specialized care within their respective medical fields.

What Considerations Should Patients Keep in Mind?

Patients considering treatment at a Single Specialty ASC should research the center’s reputation, credentials, and track record. It is essential to verify that the facility is properly accredited, staffed by qualified healthcare professionals, and equipped with the necessary technology and resources. Patients should also consult with their healthcare provider to determine if their specific condition or procedure is suitable for an outpatient setting.

Single Specialty Ambulatory Surgery Centers offer a focused and efficient approach to delivering specialized surgical care in an outpatient setting. As the demand for these centers continues to grow, it is important for patients and healthcare providers to understand their operations, benefits, and regulatory standards. By addressing frequently asked questions, we hope to provide clarity and promote informed decision-making regarding the utilization of Single Specialty ASCs for safe and effective surgical procedure

The Role of the Incorporator in Corporate Formation

Role Of The Incorporator

The Incorporator is the individual(s) who take responsibility for filing the Articles of Incorporation with the Secretary of States and officially commencing the corporate existence. The Incorporator should assign any rights to the Corporation to the Directors or the owners of the Corporation as a corporate formality after the Corporation is formed of record.

It is not necessary for all shareholders or directors to act as incorporators. The incorporator can be any person.

State Incorporation and Corporate Kit Packages


Appointment of a Compliance Office is a critical element in compliance program effectiveness. Failing to appoint a compliance officer is almost an automatic indication that a compliance program is not effective. Below is an example of a compliance officer appointment resolution.

The Board of Directors of _____________ (the “Provider”) as constituted on _____________, 2016, hereby take the following actions and resolutions at a meeting of the Board of Directors that was duly noticed, called, and at which a quorum was present to conduct business and which was held on the _____________ 2016.

The Board of Directors of the Corporation hereby take the following actions and resolutions regarding the establishment of a compliance program (hereinafter “Compliance Program”) and appointment of a compliance officer for the Corporation:

WHEREAS, it is the policy of the Provider to appoint senior-level personnel to oversee and implement the Compliance Program for the Provider.  The Compliance Program is a critical program for the continued well-being and viability of our organization that contributes significantly to maintaining the trusted relations we strive for with those we serve.

WHEREAS, successful integration of the compliance principles and standards into the daily activities of every position within the organization requires sustained efforts and vocal senior management support. Appointment of appropriate high-level staff underscores the importance assigned to this effort by senior management staff.

WHEREAS, the Provider wishes to ensure that the Provider Board of Directors adopts a corporate responsibility policy that underscores the need for governance oversight of the implementation and effectiveness of the Compliance Program and senior-level management responsibility for implementation and management of compliance efforts.

NOW THEREFORE, BE IT RESOLVED, that the Provider shall appoint a high-level member of the administrative staff to administer the Compliance Program and provide the support, staff, and resources required to implement and maintain an effective Compliance Program. The Compliance Officer may report administratively to the President of the Provider and shall have direct access to the Board of Directors for matters related to the implementation and effectiveness of the Compliance Program.

RESOLVED, that the Provider hereby appoints __________________ as Compliance Officer to serve until removed or replaced by the Board of Directors.

RESOLVED, that the Board of Directors has received from ______________ a summary of the recommendations of legal counsel regarding certain gaps that exist in the Provider’s Compliance Program and the Board of Directors wishes to direct the Compliance Officer to work in conjunction with legal counsel to develop a specific work plan to correct policy gaps that currently exist in the Compliance Program (“Work Plan”) and the Compliance Officer shall present the Work Plan to the Board of Directors for further consideration.

RESOLVED, the Compliance Officer shall work with legal counsel to further refine the structure of the Compliance Program to leverage existing Provider resources to the greatest extent possible and develop the policies necessary to implement the Compliance Structure for  consideration and approval by the Board of Directors.

RESOLVED, that the Compliance Officer shall include a report on the progress being made with respect to the Work Plan at each meeting of the Board of Directors until such time as the Board of Directors is satisfied that the basic elements of an effective Compliance Program are in place.

Successor Liability and Compliance Due Diligence

Due Diligence of Compliance Issues in Acquisitions

Successor liability issues are a central factor to consider when assessing the scope of compliance due diligence.  The acquiring organization must assess the degree to which it will assume liability for the past obligations of the target company.  If there is no risk that past obligations for compliance issues will be assumed, compliance efforts can at least conceptually be focused on integrative activities rather than assessive activities.  In effect, if there is no risk of successor liabilities, the acquiring organization can focus on the future, at least when it comes to compliance issues.  Of course there is never a perfect world and likewise, there is never a perfectly “clean” deal when it comes to successor liability.  This is particularly true in the health care industry, which has some counteractive rules regarding successor liability.

Normally, if an asset acquisition takes place, the acquiring entity will only assume the liabilities that it expressly assumes or which attach to the assets that it is acquiring.  Normally, the closing process will result in satisfaction of liabilities that might attach to the acquired assets.  Past Medicare liabilities can be an exception to this general rule.  Under Medicare rules, even if the transaction is structured as an asset purchase, all of the past provider’s Medicare liabilities will be passed forward to the acquiring provider.  This is because the Medicare change of ownership rules (sometimes referred to as CHOW rules) provide for the automatic assignment of the past provider’s Medicare provider agreement.  By virtue of the automatic assignment of the provider agreement, the acquiring party is deemed to assume virtually all past Medicare obligations of the target company.

Federal courts have consistently upheld these rules and have held the acquiring organization liable for past obligations.  Federal cases have specifically held acquiring parties for overpayments that were previously paid to the seller and civil penalties arising out of the actions of the seller that occurred before the acquisition.

The outside parameters of successor liability are yet to be tested in the context of recently expanded health care fraud and abuse laws.  Medicare regulations specifically state that the acquiring party does not assume past obligations based on personal fraud.  However, questions still remain whether corporate fraud can be assumed under successor liability theories.  Issues regarding the extent to which liability based on “knowledge-based” statutes, such as the False Claims Act, can be passed on to the acquirer.  Our initial reaction may be that it is not possible to assume responsibility for a knowledge-based violation.  But what about violations that are invoked based on the “reckless disregard” for the truth?  Is it possible that failure to perform reasonable due diligence could be construed as “reckless disregard?”

Medicare rules permit the acquiring organization to specifically reject the provider agreement of the previous entity.  However, there are very specific, time sensitive requirements for effectively rejecting past obligations.  Additionally, rejection will require the acquiring party to obtain independent certification and enter into a new provider agreement.  This process will inevitably result in interruption of revenues to the acquiring party.  This will in turn affect purchase price and other business factors.

Compliance Committee Charter Example


The Compliance Committee (“Committee”) is an oversight group for clinical compliance issues related to ________________ (the “System”).  The Committee is advisory to both the Compliance Officer of the System and the System Compliance Officer.    The Committee also assists with the Clinical Compliance Program.  The term “compliance” used in this charter refers to adhering to federal, state, and local laws and regulations; System policies; coding and billing rules for third party payors that impact or relate to System services.  The Committee membership represents the hospital services of the Health Care System defined below.

Introduction Only – Remainder of Body of Charter Omitted


Yates Memorandum Main Steps and Key Priorities

General Priorities in the Yates Memorandum

  • The Yates Memo prioritizes the manner in which Government civil and criminal law enforcement investigations are conducted.
  • It begins by proclaiming that “One of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing . . .
  • [accountability] it deters future illegal activity, incentives to changes in corporate behavior . . . and it promotes the public’s confidence in our justice system.”

The Yates Memo identifies six “key steps” to enable DOJ attorneys “to most effectively pursue the individuals responsible for corporate wrongs.”

  • Corporations will be eligible for cooperation credit only if they provide DOJ with “all relevant facts” relating to all individuals responsible for misconduct, regardless of the level of seniority.
  • Criminal and civil DOJ investigations should focus on investigating individuals “from the inception of the investigation.”
  • Criminal and civil DOJ attorneys should be in “routine communication” with each other, including by criminal attorneys notifying civil counterparts “as early as permissible” when conduct giving rise to potential individual civil liability is discovered (and vice versa).
  • Absent extraordinary circumstances, DOJ should not agree to a corporate resolution that provides immunity to potentially culpable individuals.
  • DOJ should have a “clear plan” to resolve open investigations of individuals when the case against the corporation is resolved.
  • Civil attorneys should focus on individuals as well, taking into account issues such as accountability and deterrence in addition to the ability to pay.

Yate Memorandum Compliance Program Impact – Progression of DOJ Pronouncements

Yates Memorandum and Progression of DOJ Pronouncement Memos

The Yates Memo is the latest in a line of similar pronouncements that began in 1999

  • “Bringing Criminal Charges Against Corporations
  • Thompson Memo(2003)
  • McNulty Memo(2006)
  • Filip Memo(2008)
  • U.S. Attorney’s Manual (“USAM”) as the Principles of Federal Prosecution of Business Organizations(USAM § 9-28.000).
  • The “Principles” have been revised to incorporate the Yates Memo’s dictates on individual accountability for corporate wrongdoing.