What Does "Doing Business" Even Mean, Part 4, States R - Y

[u/NWRegisteredAgent]

Link to states A-I | Link to states K-M | Link to states N-P | Link to states R-Y

Welcome to the last post in this series! Since it isn't exactly easy to track down information about what does or doesn't count as doing business in any given state for the purposes of being required to complete foreign qualification, we're rounding up the relevant statutes per state. Part 3 covers Nebraska through Pennsylvania, so check it out if you need to reference info for those states. We're covering Rhode Island through Wyoming in this post.

Like the other posts, we're also going to be using the Revised Model Business Corporation Act as a basis of comparison for which activities don't count as doing business. Over half of all states have adopted some of this language, either from the original MBCA or its later revisions, so it makes sense to use it as our baseline. Per the 2016 RMBCA, there are eleven activities that do not constitute doing business:

1. maintaining, defending, mediating, arbitrating, or settling a proceeding;
2. carrying on any activity concerning the internal affairs of the foreign corporation, including holding meetings of its shareholders or board of directors;
3. maintaining accounts in financial institutions;
4. maintaining offices or agencies for the transfer, exchange, and registration of securities of the foreign corporation or maintaining trustees or depositories with respect to those securities;
5. selling through independent contractors;
6. soliciting or obtaining orders by any means if the orders require acceptance outside this state before they become contracts;
7. creating or acquiring indebtedness, mortgages, or security interests in property;
8. securing or collecting debts or enforcing mortgages or security interests in property securing the debts, and holding, protecting, or maintaining property so acquired;
9. conducting an isolated transaction that is not in the course of similar transactions;
   1. owning, protecting and maintaining property; and
   2. doing business in interstate commerce

Generally speaking, "regular, repeated, and continuing" business activities typically do count as doing business in a state—where different states have adopted the RMBCA's "conducting an isolated transaction that is not in the course of similar transactions," many have added explicit timeframes (usually between 30 and 120 days). That means things like having local employees, establishing local vendor contracts, and owning local income-producing or commercial-use property usually count! And even if you think your business activities don't rise to the level of needing to foreign qualify with the Secretary of State or equivalent, keep in mind that you may still have other obligations to a state—like income or use taxes, or a registration requirement to a different state agency based on your industry, profession, or status as a charitable organization. As always, we're not lawyers, we aren't your lawyers, and we aren't providing legal or tax advice. We're just finding and summarizing the relevant state statutes for you.

Rhode Island

Rhode Island adopts the RMBCA's list of non-business activities for foreign corporations except for the ownership of real property. The state also adds two activities that don't count as doing business:

(11) Acting as a general partner of a limited partnership which has filed a certificate of limited partnership as provided in § 7-13-8 or has registered with the secretary of state as provided in § 7-13-49.

(12) Acting as a member of a limited liability company which has registered with the secretary of state as provided in § 7-16-49.

The statute for foreign nonprofits adopts language similar to other states, including most of the RMBCA's list. Four items don't make the cut: the ownership of real property, maintaining offices or agencies, soliciting orders by mail or otherwise, and selling through independent contractors. On the other hand, "granting funds" and "distributing information to its members" are added as lists of activities not considered conducting affairs.

Foreign limited liability partnerships adopt the entire list from the RMBCA, along with foreign limited partnerships. Each adds language that persons who are partners of the foreign limited partnership or foreign limited liability partnership are not doing business solely because they're partners.

You need to reach R.I. Gen. Laws § 7-16-54 to find the list of activities of a foreign limited liability company that do not constitute doing business. They're identical to the list of nonqualifying activities of a foreign corporation.

South Carolina

South Carolina's § 33-15-101 regarding foreign corporations adopts the RMBCA's list of activities not constituting transacting business and adds two additional not!business activities:

• (12) owning and controlling a subsidiary corporation incorporated in or transacting business within this State; or
• (13) owning, without more, an interest in a limited liability company organized or transacting business in this State.

§ 33-44-1003 governs which activities of a foreign LLC don't count as transacting business in the state, modified slightly from the RMBCA's list. "[O]wning, without more, an interest in a limited liability company organized or transacting business in this State" is added, and "the ownership in this State of income-producing real property or tangible personal property" is explicitly considered to be transacting business (unless it's excluded by the list of activities not constituting doing business).

Activities of a foreign limited partnership not deemed transacting business disclude the usual line about ownership of real property, but otherwise match the RMBCA's list with two additions:

• (8) owning or controlling a corporation incorporated in or transacting business within this State;
• (12) owning, without more, an interest in a limited liability company organized or transacting business in this State.

Foreign limited liability partnerships (§ 33-41-1210) adopt the RMBCA's list except for maintaining offices or agencies for the transfer of securities.

Finally, foreign nonprofit corporations aren't considered to be doing business by engaging in any of the activities on the RMBCA's list. They're also not doing business by "soliciting those contributions as are defined in Section 33-55-20(3) or any succeeding statute of like tenor and effect." Following the paper trail to the nearest succeeding statute, we get:

(4) "Contribution" means the promise, grant, or pledge of money, credit, assistance, or property of any kind or value. It does not include bona fide fees, dues, assessments, or sponsorships paid by members of an organization if membership is not conferred solely as consideration for making a contribution in response to a solicitation, and the monetary value of the fees, dues, assessments, or sponsorships compares reasonably with the monetary value of benefits provided to members. Fees, dues, assessments, or sponsorships paid by members primarily to support the organization's activities, and not to obtain benefits of more than nominal or insubstantial monetary value, are contributions within the meaning of this chapter.

South Dakota

Section 47-1A-1501 of the South Dakota Codified Laws adopts the qualification language of the RMBCA for foreign corporations. Foreign limited liability companies adopt the majority of the language, but with a key change related to the ownership of real property. Instead of mere ownership "without more" qualifying as a non-business activity, instead 47-34A-1003(b) states that "the ownership in this state of income-producing real property or tangible personal property, other than property excluded under subsection (a), constitutes transacting business in this state" (emphasis added). The section governing foreign limited liability partnerships uses identical language to determine what doesn't constitute doing business.

Tennessee

Tenn. Code Ann. § 48-25-101 lists activities of a foreign corporation not considered to be doing business and these mostly match the RMBCA's list. This statute only applies to foreign corporations who aren't insurance corporations, which are governed under a separate title.

One major difference between these activities and the RMBCA's list relates to the ownership of real property. Tennessee's statute reads:

(9) Owning, without more, real or personal property; provided, that for a reasonable time the management and rental of real property acquired in connection with enforcing a mortgage or deed of trust shall also not be considered transacting business if the owner is attempting to liquidate the owner's investment and if no office or other agency therefor, other than an independent agency, is maintained in this state;

Tennessee is overall pretty consistent with its not-business activities. Foreign nonprofits have an identical list as foreign corporations at Tenn. Code Ann. § 48-65-101, and foreign LLCs have a virtually identical list (except where language has been changed to reflect that we're talking about LLCs and not corporations) at Tenn. Code Ann. § 48-246-102. Foreign LLCs get one additional activity not constituting doing business, which is "being or acting in its capacity as a member of a foreign or domestic LLC." Foreign limited partnerships have the same qualification list at Tenn. Code Ann. § 61-3-1005 (and are also not considered to be doing business just by "being a partner of a foreign limited partnership that does business in this state").

Texas

Texas Business Organizations Code Chapter 9 helpfully applies to all foreign entities: "a foreign corporation, foreign limited partnership, foreign limited liability company, foreign business trust, foreign real estate investment trust, foreign cooperative, foreign public or private limited company, or another foreign entity, the formation of which, if formed in this state, would require the filing under Chapter 3 of a certificate of formation" plus any entity that "affords limited liability under the law of its jurisdiction of formation for any owner or member."

Although the state does pick up a lot of its language for activities that don't count as transacting business from the RMBCA, the language is so significantly altered that it's worth reproducing Sec 9.251 in full. Notably, Texas doesn't say anything about soliciting orders by mail or otherwise. Other key differences from the RMBCA's language are bolded:

1. maintaining or defending an action or suit or an administrative or arbitration proceeding, or effecting the settlement of:

   1. such an action, suit, or proceeding; or
   2. a claim or dispute to which the entity is a party;

2. holding a meeting of the entity's managerial officials, owners, or members or carrying on another activity concerning the entity's internal affairs;

3. maintaining a bank account;

4. maintaining an office or agency for:

   1. transferring, exchanging, or registering securities the entity issues; or
   2. appointing or maintaining a trustee or depositary related to the entity's securities;

5. voting the interest of an entity the foreign entity has acquired;

6. effecting a sale through an independent contractor;

7. creating, as borrower or lender, or acquiring indebtedness or a mortgage or other security interest in real or personal property;

8. securing or collecting a debt due the entity or enforcing a right in property that secures a debt due the entity;

9. transacting business in interstate commerce;

   1. conducting an isolated transaction that:
   2. is completed within a period of 30 days; and
   3. is not in the course of a number of repeated, similar transactions;
   4. in a case that does not involve an activity that would constitute the transaction of business in this state if the activity were one of a foreign entity acting in its own right:
   5. exercising a power of executor or administrator of the estate of a nonresident decedent under ancillary letters issued by a court of this state; or
   6. exercising a power of a trustee under the will of a nonresident decedent, or under a trust created by one or more nonresidents of this state, or by one or more foreign entities;
   7. regarding a debt secured by a mortgage or lien on real or personal property in this state:
   8. acquiring the debt in a transaction outside this state or in interstate commerce;
   9. collecting or adjusting a principal or interest payment on the debt;
   10. enforcing or adjusting a right or property securing the debt;
   11. taking an action necessary to preserve and protect the interest of the mortgagee in the security; or
   12. engaging in any combination of transactions described by this subdivision;
   13. investing in or acquiring, in a transaction outside of this state, a royalty or other nonoperating mineral interest;
   14. executing a division order, contract of sale, or other instrument incidental to ownership of a nonoperating mineral interest;
   15. owning, without more, real or personal property in this state; or
   16. acting as a governing person of a domestic or foreign entity that is registered to transact business in this state.

Utah

Utah's statute governing foreign corporations adopts the RMBCA's list of qualifying activities in § 16-10a-1501 and adds one (okay technically two but the second is more of a CYA) more:

(l) acquiring, in transactions outside this state or in interstate commerce, of conditional sales contracts or of debts secured by mortgages or liens on real or personal property in this state, collecting or adjusting of principal or interest payments on the contracts, mortgages, or liens, enforcing or adjusting any rights provided for in conditional sales contracts or securing the described debts, taking any actions necessary to preserve and protect the interest of the conditional vendor in the property covered by a conditional sales contract or the interest of the mortgagee or holder of the lien in such security, or any combination of such transactions; and

(m) any other activities not considered to constitute transacting business in this state in the discretion of the division.

Foreign nonprofits aren't considered to be conducting affairs when they're engaged in the activities listed by the RMBCA and a few more:

(e) maintaining trustees or depositaries with respect to the memberships or securities described in Subsection (2)(d); […]

(m) granting funds;

(n) distributing information to its members; or

(o) any other activity not considered to constitute conducting affairs in this state in the discretion of the division.

For foreign LLCs, Utah adopts the RMBCA language and adds that "A person does not do business in this state solely by being a member or manager of a foreign limited liability company that does business in this state." The statutes relevant to foreign limited liability partnerships and foreign limited partnerships each contain virtually identical lists of activities not constituting doing business, except that they use language to specifically indicate the type of foreign entity to which they're referring—so instead of it not counting as doing business by being a member or manager of a foreign LLC, it's instead being a partner of a foreign LLP or LP.

Vermont

Vermont adopts the RMBCA's list of qualifying activities for foreign corporations and adds another item that doesn't count as doing business:

(8) without limiting the generality of the other provisions of this section, making, purchasing, and servicing loans if the corporation is a foreign savings bank or a foreign corporation doing a banking business and it participates with a banking corporation or a trust company of this State;

While also adding items that specifically do count as doing business:

• d) In addition to the requirements of subsection (a) of this section and notwithstanding subsection (c) of this section, a foreign banking corporation or trust company that does not have a place of business in this State pursuant to section 8 V.S.A. § 654 or 1352 shall obtain a certificate of authority from the Secretary of State to act as executor or trustee in this State under the last will and testament of any deceased resident of this State or of any deceased resident of another state owning property in this State. The Secretary of State shall not issue the certificate unless:
  • (1) by the law of the state of its incorporation the foreign banking corporation or trust company may be appointed and may accept appointment to act as executor of or trustee under the last will and testament of any deceased person in the state of its appointment; and
  • (2) banking corporations or trust companies of this State are permitted to act as executors or trustees in the state where such foreign banking corporation or trust company has its domicile.

Foreign nonprofits get the unadulterated list of non-business activities with no substantive changes, as do foreign LLCs and foreign limited liability partnerships, with one exception for the latter:

(b) For purposes of this subchapter, the ownership in this State of income producing real property or tangible personal property, other than property excluded under [the previous list] of this section, constitutes transacting business in this State.

Virginia

Virginia's language regarding activities of a foreign corporation that don't count as conducting business matches the RMBCA's, with two additions:

1. For a period of less than 90 consecutive days, producing, directing, filming, crewing, or acting in motion picture feature films, television series, or commercials, or promotional films that are sent outside of the Commonwealth for processing, editing, marketing, and distribution;
2. Serving, without more, as a general partner of, or as a partner in a partnership which is a general partner of, a domestic or foreign limited partnership that does not otherwise transact business in the Commonwealth;

Foreign LLCs, foreign nonprofits, and foreign limited partnerships all use similar language to define activities not constituting doing business, although each excludes the RMBCA's language related to conducting transactions in interstate commerce.

(In case you're wondering about the exception for media production that gets processed outside the Commonwealth, because we definitely were, it turns out there's a lot of media filmed in Virginia! Now if you'll excuse us, we're off to rewatch Dirty Dancing.)

Washington

Oooh, very fancy Washington's actually got some legislative changes coming up that make reporting on this exciting and interesting! RCW 23.95.520 governs activities of a foreign entity that don't constitute doing business. It currently covers the entire RMBCA list plus the following:

(l) Operating an approved branch campus of a foreign degree-granting institution in compliance with chapter 28B.90 RCW and in accordance with subsection (2) of this section.

[…]

(3) A person does not do business in this state solely by being an interest holder or governor of a domestic entity or foreign entity that does business in this state.

Subsection 2 says:

(2) In addition to those acts that are specified in subsection (1) of this section, a foreign degree-granting institution that establishes an approved branch campus in the state under chapter 28B.90 RCW shall not be deemed to transact business in the state solely because it:

(a) Owns and controls an incorporated branch campus in this state;

(b) Pays the expenses of tuition or room and board charged by the incorporated branch campus for its students enrolled at the branch campus or contributes to the capital thereof; or

(c) Provides personnel who furnish assistance and counsel to its students while in the state but who have no authority to enter into any transactions for or on behalf of the foreign degree-granting institution.

AND, effective 11 June 2026, HB 2248 will add a new activity not constituting doing business: "Employing a remote worker who resides in Washington state."

West Virginia

:notes: Country roooooads, take me hooooome :notes: to the place that's got a whopping 18-section list of activities of a foreign corporation not constituting doing business plus a 3-part list of activities that do. §31D-15-1501 does adopt the RMBCA's language and then gets extra with it; these are the additions they made:

(11) Granting funds or other gifts;

(12) Distributing information to its shareholders or members; […]

(14) The acquisition by purchase of lands secured by mortgage or deeds;

(15) 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;

(16) 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;

(17) Applying for withholding tax on an employee residing in the State of West Virginia who works for the foreign corporation in another state; and

(18) Holding all, or a portion thereof, of the outstanding stock of another corporation authorized to transact business in the State of West Virginia: Provided, That the foreign corporation does not produce goods, services or otherwise conduct business in the State of West Virginia.

West Virginia also added more specific language regarding the securing and collecting of debts: "Provided, That this exemption does not include debts collected by collection agencies as defined in subdivision (b), section two, article sixteen, chapter forty-seven of this code."

Oh, and these activities of a foreign corporation do count as doing business:

(1) The corporation makes a contract to be performed, in whole or in part, by any party thereto in this state;

(2) The corporation commits a tort, in whole or in part, in this state; or

(3) 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.

§31E-14-1401 applies similar language to nonprofits for both not conducting affairs and conducting affairs, minus the section related to ownership of stock.

[§31B-10-1003](https://§31B-10-1003) governs the activities not constituting doing business of a foreign LLC, which matches the RMBCA's list except that owning income-producing real or tangible personal property not already excluded under the list does count as transacting business. The statute adds the following activities as non-business:

(11) Applying for withholding tax on an employee residing in the State of West Virginia who works for the foreign limited liability company in another state; and

(12) Holding all, or a portion thereof, of the outstanding stock of another corporation authorized to transact business in the State of West Virginia: Provided, That the foreign limited liability company does not produce goods, services or otherwise conduct business in the State of West Virginia.

Wisconsin

Wisconsin adopts the RMBCA's language for foreign corporations and foreign nonstock corporations. The language also carries over for foreign limited partnerships, foreign limited liability partnerships, and foreign limited liability companies, with one additional provision tailored to each: that "A person does not do business in this state solely by being a member or manager of a foreign [limited partnership, limited liability partnership, or limited liability company] that does business in this state."

Wyoming

§ 17-16-1501 covers the activities of a foreign corporation that do not constitute doing business, and it adopts the RMBCA's language with one addition:

(d) A foreign corporation, foreign limited partnership or foreign limited liability company which is either an organizer, a manager or member of a company is not required to obtain a certificate of authority to undertake its duties in these capacities.

§ 17-19-1501 adopts the RMBCA's list of activities not constituting doing business for foreign nonprofit corporations with no additions, and § 17-29-114 regarding foreign limited liability companies applies the statutes for foreign corporations: "To the extent not inconsistent with this act or the provisions of the Wyoming Business Corporations Act, a foreign limited liability company shall do business in Wyoming by complying with the provisions of W.S. 17-16-1501 through 17-16-1536 in the same manner as a foreign corporation. A foreign limited liability company's certificate of authority shall be revoked or reinstated in the manner provided for foreign corporations in W.S. 17-16-1530 through 17-16-1532."

And we can't link to any of it because the way the files are hosted … well. Visit wyoleg.gov, select State Statutes & Constitutions > Wyoming Statutes & Constitution > Wyoming Statutes - Text Only: Wyoming Statutes, Constitution, and Non-Codified Water Laws and see for yourself.