First, a bit of background for anyone unfamiliar:<p>Foreign registration is the requirement for a corporation based in one state to _register_ to do business in another state. You can incorporate in Delaware, for example, but there is a registration requirement to do business in California.
Two things seem clear to me: First, internet businesses do commerce that is very often out of state, and second, it seems highly unlikely that they register in every state they do business in.<p>So my question is this: Am I misinterpreting this part of the law? Or is it just not enforced too strongly?
Every state has a requirement that an out-of-state entity that is "doing business" within its borders register with it as a foreign corporation (or LLC) as a pre-condition to transacting such business.<p>While the requirements vary from state-to-state, there is always some minimum threshhold that must be met, whether it consists of having a physical presence in the state, having employees in the state, accepting orders in the state, or anything else the state authorities consider a minimum threshhold.<p>Internet companies, like any other, must register in every state in which they are "doing business" in such a way as to meet the minimum threshhold for that state. Very often, they do <i>not</i> meet the threshhold requirements and thus do not need to register.<p>You are correct as well that these laws are not necessarily strictly enforced. The normal penalty for failing to register as a foreign corporation, for example, is that the entity cannot sue or defend itself from a lawsuit in the state until it does register. However, an entity can usually cure this problem by registering after-the-fact (and can then avail itself of the courts as needed). This system sometimes causes companies to be lax about doing such registrations even when they technically should do them.<p>That said, as a rough rule of thumb, most companies do not normally need to register in the various jurisdictions unless they have a physical presence there. Best practice is to consult with a knowledgeable lawyer on the issue to make sure.
While I can't confirm your interpretation of this particular law, I'm certain that no internet businesses register themselves in every jurisdiction in which they potentially offer their goods for sale. I'm uncertain whether this is a matter of interpretation or enforcement, but practically speaking I wouldn't worry about compliance here. If you go searching for laws that you must obey, you will likely conclude that there is no possible way to run any business legally.