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Foreign Entity

Asked by: Robyn Bottens  — 5 May, 2012

We are incorporated in the state of CA. We distribute fertilizer products directly to farmers in CA, but have a friend interested in selling our products to their customer base in MI. Our friend in MI would operate as and Independent Business Owner and purchase the products from us and resell them. I’m thinking that it’s not necessary to file for authority to do business in Michigan, am I correct?

Answered by: admin  — 5 May, 2012

Dear Robyn,

Technically your company does not do business in Michigan directly, since your friend operates as an independent reseller. As such you don’t need to foreign qualify your company in Michigan, as no nexus is established in that state.

Also, he could do this business as a sole proprietor, however it might be a good idea for him to organize his business as a separate entity (such as LLC or Corporation). This way there would be no doubt that he operated as an independent entity and not as your company representative.

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