How is a foreign corporation defined?

A foreign corporation is specifically defined as a corporation that is incorporated in one state but conducts business in another state. This distinction is important in corporate law because it indicates that the corporation must comply with the laws and regulations of the state where it is operating, even though its formation is rooted in a different jurisdiction.

For example, if a corporation is formed in Delaware but operates in California, it is considered a foreign corporation in California. This definition ensures that the interests of the state where the corporation is doing business are protected, as it has an economic impact in that location, regardless of where it was originally incorporated. Compliance with local regulations, taxes, and business practices is essential for foreign corporations to legally operate within that state.

Understanding this definition helps clarify the responsibilities and obligations that corporations have when they engage in business activities outside of their state of incorporation.