Each state has laws that enumerate the factors that constitute legally "doing business" in the state. For a summary of each state's law, see:
- Doing Business in States Other Than the State of Incorporation (BNA State Tax Management Portfolios 1770 and 1780);
- CSC's The 50-State Qualification Handbook (sold by Lexis); and/or
- CT's What Constitutes Doing Business by a Corporation in States Foreign to the State of its Incorporation.
It is often necessary to prove that a company does business in a state in order to get jurisdiction to sue the business in that state's court. Some ways to show that a company does business in a state include:
(a) searching for a Secretary of State filing (see "Secretary of State Records;" this is pretty much conclusive, if you can get one);
(b) search for a reported judicial opinion from a prior state court case;
(c) search for a docket sheet to see if the company has ever been sued in the state before;
(d) search public records using Accurint, TLO, KnowX or another vendor to see if the company has any real property holdings, bankruptcies, liens, judgments, etc., in the state (see also "Finding Businesses");
(e) search a state-wide newspaper database for an article indicating the company's presence in the state;
(f) search the company's Web site, SEC filings or any other available materials to see if they mention the state;
(g) search the D&B database (see "Dun & Bradstreet Reports") to see if the business has an office in the state;
(h) have the Competitrack or another video monitoring service search for the company's advertisements in state-specific newspapers and/or TV and radio shows; and/or
(i) anything else you can think of.
The legal issues relating to doing business in a state are discussed in the "Doing Business" chapter of the Practice Guide in Volume 1 of Aspen's Corporation Service. The chapter includes a chart listing each state's penalty for "Transacting Business Without Authority."