Do I Have To Register With The Secretary Of State Before Registering With The State Of La

Foreign or Out-of-State Entities

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Find: Businesses performing disaster- or emergency-related piece of work: Certain out-of-state businesses who enter the state to perform disaster- or emergency-related work in this country during a disaster response period are exempt from the requirement to annals every bit a foreign entity pursuant to Chapter 112 of the Concern & Commerce Code. If your out-of-state business concern is exempt, you may choose to file a notification argument with the secretary of state. Please run into Form 3901 (PDF) for out-of-country businesses and Form 3902 (PDF) for affiliates of in-state businesses. All exemptions under Chapter 112 of the Business & Commerce Code cease at the end of the disaster response period. The secretary of country cannot advise yous regarding whether your business concern qualifies for an exemption under Chapter 112.

For information regarding state tax bug for out-of-state businesses assisting with recovery, delight encounter the Texas Comptroller of Public Accounts website.

Whether an entity is domestic or foreign does not depend on the location of the master business part. Instead, it depends on where the entity was formed and what police force governs its internal affairs. If an organization was formed under, and the internal affairs are governed by, the laws of a jurisdiction other than Texas, the system is a "foreign entity." We sometimes refer to foreign entities equally out-of-state entities to reinforce the concept that entities formed in other U.S. states are strange entities, every bit well as entities formed exterior of the Us.

Registration Requirements

Department ix.001 of the Texas Business Organizations Code ("BOC") requires the post-obit types of strange entities to file an application for registration with the Texas secretarial assistant of state if the entity is "transacting business" in Texas:

corporations;
limited partnerships;
limited liability partnerships;
limited liability companies;
concern trusts;
real estate investment trusts;
cooperatives;
public or private limited companies;
any other foreign entity that, if formed in Texas, would be formed as a corporation, limited partnership, express liability visitor, professional person association, cooperative, or real estate investment trust; and
any other strange entity that affords limited liability under the police of its jurisdiction of germination for whatsoever possessor or member.

Other laws or circumstances may likewise be reasons for registration.

Section 201.102 of the Texas Finance Code requires an out-of-state financial institution to register with the secretary of state before opening a branch or other role in Texas.
It has been the practice of the Texas Department of Insurance to refuse a non-resident agency license for a foreign entity unless the entity has registered with the secretary of country. HB 2503, passed in the 2011 Legislative Session, removes this requirement effective 09/01/2011.
Some banks volition not do concern with an unregistered foreign entity, despite that BOC § 9.251 states that maintaining a bank account in this country is not, in and of itself, transacting business in Texas.

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Name Requirements

A foreign entity registering to transact business organisation in Texas must register nether a proper noun that:

contains a recognized term of system for the entity type as listed in sections 5.054 to five.059 of the BOC;
does not contain any word or phrase that indicates or implies that the entity is engaged in a concern that the entity is not authorized to pursue; and
is available in Texas, that is, is distinguishable in the records of the secretarial assistant of country from the name of any existing domestic or strange filing entity, or whatsoever proper name reservation or registration filed with the secretarial assistant of land.

View our name availability rules.

You may asking a preliminary name availability determination by calling (512) 463-5555 or by email.

Registration Under a Fictitious Name

If the entity's legal name does not meet the in a higher place requirements the entity must register in Texas under an assumed name (d/b/a). This special type of assumed name is oftentimes referred to as a fictitious proper name.

A fictitious name is a special blazon of assumed name considering, unlike other assumed names, a fictitious proper noun must run into the above requirements.
A foreign entity that registers to transact business organisation under a fictitious proper name is stating that the entity volition transact business in Texas under that proper noun. BOC § ix.004.
A foreign entity registering under a fictitious name must file assumed name certificates with the secretary of state (Class 503 (Word 125kb, PDF 74kb)) and the appropriate canton or counties.

Where to file assumed name certificates.

The proper noun requirements for registration to transact business organisation in Texas exercise not affect trademark or other intellectual property rights. A certificate of registration or assumed name certificate does not authorize use of the name in violation of another person's legal rights and does not, in and of itself, offering any trademark protection. See Trademark FAQs for more information.

Determining Whether to Annals

Texas statutes do not define "transacting business." Helpful resource to determine whether an entity'south activities in Texas require registration include:

BOC § nine.251, which lists activities that are non considered transacting business;
Example law from Texas and other U.S. jurisdictions regarding foreign qualification;
Texas Chaser General Opinions; and
Private attorneys familiar with corporate law.

Another helpful resource may be the comptroller's Texas Nexus Questionnaire (PDF), used by the comptroller to determine if a foreign entity is "doing business organization" in Texas for tax purposes.

The threshold level of activity required for a revenue enhancement nexus is more often than not lower than the threshold level of activity that requires registration with the secretarial assistant of state.
Therefore, if the Texas Nexus Questionnaire results in a decision of "no nexus," the entity is probably non transacting business in Texas either.
On the other hand, if the Texas Nexus Questionnaire results in a determination of "nexus," the entity should consider registration.
Call back that, for registration with the secretary of state, the Texas Nexus Questionnaire can be a useful tool, but does not requite a definitive answer.

Don't forget that even if you determine that your entity is not transacting business in Texas nether the BOC, you lot may demand to register under other law, such as the Insurance or Finance Codes.

No member of the secretary of country staff tin determine whether an entity is transacting concern in Texas or needs to file an application for registration. Determining whether to register is a business determination that may have tax consequences, enhance legal bug, or impact licensing from another agency or land board.

Penalties for Not Registering

Failure to annals can upshot in penalties, including:

Inability to maintain an action, conform, or proceeding in a Texas court until registration;
Injunction from transacting business in Texas;
Civil penalty equal to all fees and taxes that would have been imposed if the entity had registered when first required; and
Late filing fees owed to the secretary of country past an entity registering more xc days later on first transacting business organisation in Texas.

How Do I Calculate My Late Filing Fees?

Late filing fees are determined by multiplying the number of whole or partial calendar years that have passed since the date the entity initially transacted business concern in Texas times the registration fee.

For nonprofit corporations and cooperative associations, the registration fee is $25.
For all other entities, the registration fee is $750.
Instance: A for-profit corporation that has been transacting business organization in Texas since June 1, 2007 would owe $three,000 in tardily filing fees if registering on December 1, 2010. The full fees due with the application for registration would therefore exist $three,750.

(The post-obit entity types are not charged late fees for years prior to 2006: professional corporations, professional associations, business trusts, real estate investment trusts, and other foreign entities non required to register under prior law.)

Try Our Late Fees Calculator! (XLS, 63kb)

Limitation of Late Fees

If your entity will be assessed more than five years of late penalties, and y'all meet certain criteria, you may asking that the secretarial assistant of state limit the fees you owe. The secretary of country volition cap the late fees at v years for an entity that (ane) submits show of an active right to transact business with the comptroller'southward office; and (two) certifies to the truth of the post-obit statements:

The entity has satisfied all of its franchise, sales, and other tax obligations with the Texas Comptroller of Public Accounts. Attach a screen print from the comptroller's office showing the entity has a status of "agile correct to transact business".
The entity does not owe any other taxes, fees, or assessments that are administered by any other Texas land agency.
The entity has not received a letter of the alphabet from the Office of the Secretarial assistant of State regarding the need to submit an application for registration, or if it has received such a letter, information technology has responded to the secretarial assistant of state within 45 days.

The full general policy of the secretary of state is that we do not waive late fees for foreign entities, aside from the five year fee cap, if applicative. If an entity believes it has unique circumstances and wishes to entreatment the assessment of tardily fees, the appeal shall exist in writing and may be sent by email, fax to 512-475-2781 or mail service to P.O. Box 13697, Austin, TX 78711-3697, Attn: Corporations Attorneys.

Special Bug for Express Liability Limited Partnerships (LLLPs)

A foreign limited liability limited partnership transacting business in Texas must apply for two certificates of registration. An LLLP transacting business in Texas must register as both a express partnership and as a limited liability partnership.

Grade 306 (Word 167kb, PDF 126kb) – Limited Partnership Awarding for Registration
Form 307 (Word 115kb, PDF 67kb) – Limited Liability Partnership Awarding for Registration

Other Issues for Foreign Entities in Texas

Texas Taxes

If an entity has failed to file franchise taxation reports and/or pay franchise taxes, it is invited to contact the comptroller to determine if the entity qualifies to enter into a Voluntary Disclosure Understanding.
Overview of Taxes Collected by the Texas Comptroller of Public Accounts
- Sales Tax
- Franchise Taxation
Unemployment Taxation Collected by the Texas Workforce Commission

Permits and Licenses

There is no general concern license in Texas; however, depending upon the type of business organisation the entity engages in, additional licensing requirements from other Texas agencies might apply.

Texas Section of Licensing and Regulation
Find Business Licenses & Permits (SBA.gov)
Historically Underutilized Business Plan
Texas Government Portal

Employer Issues

Texas Workforce Commission: Information on requirements when you lot have Texas employees.
Texas Department of Insurance: Information about the Texas workers' compensation system.
Texas Attorney General Employer Information Center: Information nigh employer new hire and termination reporting requirements.