diff --git a/docs/dexit-readiness-assessment.md b/docs/dexit-readiness-assessment.md index d271153..caae501 100644 --- a/docs/dexit-readiness-assessment.md +++ b/docs/dexit-readiness-assessment.md @@ -110,6 +110,70 @@ state paperwork and set up RA + first annual report; the client's lawyer handles corporate-approval documents. That matches how the DEXIT page is already written ("your counsel just reviews the board and stockholder consent"). +## Complication: the company has foreign qualifications in other states + +This is common and important. A Delaware corp that operates in California, New York, +Texas, etc. is "foreign qualified" (registered as a foreign entity / has a Certificate +of Authority) in each of those states. When it domesticates DE -> NV/TX, every one of +those foreign registrations is affected. Getting this wrong means the company is +suddenly doing business unregistered in states where it operates - default judgments, +loss of court access, penalties. So this is part of the core offer, not an afterthought. + +### What actually has to happen to the foreign registrations +After a conversion/domestication, the entity is the *same legal person* but its +**home (domestic) state changed**. In each state where it was foreign-qualified: +- **The state where it is moving TO** (say it domesticates to Texas but was foreign + qualified in Texas): the foreign registration must be **withdrawn/cancelled** because + the company is now a *domestic* Texas entity - you cannot be both foreign and + domestic in the same state. (This is exactly why ~zero of our OTC sample were + TX-incorporated even when TX-based: they were DE corps foreign-qualified in TX.) +- **Every OTHER state it was qualified in** (CA, NY, FL, etc.): the foreign + qualification generally **stays in place but must be updated** to reflect the new + state of incorporation and (often) a new formation date / charter document. States + differ: + - Some accept an **amendment to the foreign registration** (file an amended + Application for Authority / Statement of Change reflecting the new domestic state). + - Some require you to **withdraw the old foreign registration and re-file a new one** + from the new home state. + - A handful treat the domestication as a non-event if the name + identity are + unchanged, requiring only an informational update at the next annual report. +- **Name conflicts** can surface: a name available to a DE corp as "foreign" in a state + might collide on re-domestication; we should run name availability in each qualified + state as part of the move. + +### Good news: we already have the building block +We have a working **foreign-qualification** capability: +- SKUs `foreign-qualification-single` ($149 + state fee) and `foreign-qualification-multi` + (discounted per-state), `ForeignQualificationHandler` that **fans out per state**, + a `state_registrations`/foreign-qual schema (migration 066/073), and the same + formation state-adapter pool. So re-qualifying or amending in N states reuses + existing plumbing - we don't build it from scratch. +- What's missing is the **amend / withdraw** modes (the handler today is oriented to + *new* registration), and an intake step that asks "which states are you currently + foreign-qualified in?" so we can fan the move out across them. + +### Product implication +The conversion offer should be **multi-part and priced per state touched**: +1. Core domestication (DE-out + new-state-in) - the base fee. +2. For each state the company is foreign-qualified in: an **amend / re-qualify / + withdraw** line item (reuse foreign-qualification per-state pricing). +3. Withdraw the now-redundant foreign registration in the destination state if one + existed. +4. Update the registered agent in each affected state where we maintain it. + +This is also a **revenue multiplier**: a single DE corp qualified in 5 states is one +domestication + ~5 foreign-qual amendments + recurring RA/annual-report in each. But +it must be scoped at intake - we have to ASK for the list of states up front, estimate +per-state, and disclose that government fees vary and are billed at cost. + +### Intake + data we must capture for a move +- current domestic state (DE), destination state (NV/TX/FL), entity type +- entity name + EIN (kept), current good-standing + franchise-tax status in DE +- **the full list of states where the company is foreign-qualified** (and its DBA/ + assumed names in each) - this drives the per-state fan-out +- where it actually operates / has nexus (to advise whether to keep each qualification) +- whether counsel is handling the board/stockholder consent (always yes) + ## Recommended build plan (generic corporate flow + a "move" capability) Keep it generic, not DEXIT-specific: