Florida Broker Practice Exam

What type of corporation operates in Florida but is formed under the laws of another state?

1. Domestic corporation

2. Foreign corporation

3. Limited liability corporation

4. Incorporated partnership

The correct answer is: Foreign corporation

A foreign corporation refers specifically to a corporation that is established under the laws of one state but operates in another state. In this context, when a corporation is formed in a state outside of Florida but conducts business there, it is classified as a foreign corporation from the perspective of Florida law. Such corporations must typically register to do business in Florida to comply with state regulations, which may include obtaining a certificate of authority. A domestic corporation, on the other hand, is one that is formed in Florida itself. The other entities mentioned, like limited liability companies and incorporated partnerships, do not fit the specific definition applied to corporations in this context. Thus, it is clear why the designation of foreign corporation is appropriate for a business formed in a different state but operating within Florida.