What is the difference between a domestic and foreign entity?

In the context of business entities, a domestic entity refers to a company or organization that is incorporated and operating within the state where it was formed. This means that the company is organized and registered under the laws of that specific state, and its rights and obligations are governed by state regulations. On the other hand, a foreign entity refers to a business that is incorporated and operating in a different state from where it was originally formed. These companies are considered foreign entities in any state outside of their state of formation. Foreign entities are required to register and comply with the specific regulations and requirements of each state they operate in, such as obtaining a Certificate of Authority or filing annual reports.