How to Start a Foreign LLC Registration in Texas | Expanding Horizons


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Start a Foreign LLC in Texas

If you are planning to start an LLC, operating across other state borders can be lucrative. However, it is crucial to understand the legal requirements and processes involved in expanding your business to another state. 

In this article, Webinarcare Editorial Team will provide a comprehensive guide on starting a foreign LLC registration in Texas, detailing the steps, eligibility requirements, and essential considerations for companies looking to operate in the Texas jurisdiction. You must be guided by all the factors gathered in this article.

What is a Foreign LLC?

A foreign LLC is an LLC that was initially formed in one state but sought to conduct business in another state. It is essential to note that a foreign LLC is not an LLC formed outside the United States; it refers to one formed in a different state.

To operate legally in Texas, a foreign LLC must register with the Texas Secretary of State and adhere to the necessary regulations and requirements. This often involves filing paperwork, paying fees, and designating a Registered Agent to receive legal documents on behalf of the company.

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Before you start a foreign LLC registration, it is advised that you consult with a legal expert. They will be aware of what’s best for you and your business. You can always start an LLC in Texas, if you wish to protect your personal assets from business debts.

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How to Start a Foreign LLC Registration in Texas

Once you have confirmed that your LLC meets the eligibility requirements, follow these steps to register your foreign LLC in Texas:

Step 1: Obtain Certificate of Fact – Status From The Original Certificate of Formation

A Certificate of Fact – Status is a document issued by the Texas Secretary of State or a similar government agency in each state. It verifies that a business entity, such as a corporation or limited liability company (LLC), is legally registered and authorized to conduct business within the state. The certificate also confirms that the business complies with state regulations and is up-to-date with its tax and reporting obligations.

To obtain a Certificate of Fact – Status, you typically need to request it from the Texas Secretary of State. Visit their website to request a Certificate of Fact – Status. 

Step 2: Appoint a Registered Agent

A Registered Agent is a person or company that serves as your LLC’s official point of contact with the Texas government. This individual or entity is responsible for receiving legal documents, tax notices, and other official communications on behalf of your LLC. The Registered Agent must have a physical address in Texas and be available during regular business hours.

In Texas, your Registered Agent must:

  • Be a resident of Texas or a business entity authorized to do business there.
  • Have a physical address in Texas (P.O. boxes are not acceptable)

It’s essential to choose a reliable and responsible Texas Registered Agent, as failure to receive and respond to legal documents can have serious consequences for your business. 

You can serve as your own Registered Agent or appoint a friend or family member, or hire a Professional Texas Registered Agent Services.

Step 3: Complete and File an Application for Registration

This application will require you to provide information about your LLC, such as its name, original Certificate of Formation, principal office address, and Registered Agent information. Additionally, you will likely need to submit a copy of your Certificate of Fact – Status and pay a filing fee of $750.

Step 4: Comply with Texas Tax and Reporting Requirements

After registering your foreign LLC, you may need to obtain a Tax Identification Number and register for applicable sales and use taxes. Furthermore, your LLC will likely be required to file Annual Reports with the Texas Secretary of State. Also, your Registered Agent must provide updated information about your company’s operations and financial status. Be sure to maintain proper records and documentation to ensure compliance with these requirements.

Here are the different TIN:

  • Social Security number “SSN
  • Employer Identification Number “EIN
  • Individual Taxpayer Identification Number “ITIN
  • Taxpayer Identification Number for Pending U.S. Adoptions “ATIN
  • Preparer Taxpayer Identification Number “PTIN

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom – ($0 + State Fee for LLC formation)

Additional Requirements and Considerations for Foreign LLCs in Texas

In addition to the steps listed above, foreign LLCs operating in Texas should also be aware of the following requirements and considerations:

Obtain Necessary Licenses and Permits

Depending on your business’s nature, you may need to secure state and local licenses and permits to operate legally in Texas. The business license fee in Texas ranges from $50 – $300, which can be paid in the Texas Secretary of State.

Comply with Employment Laws and Regulations

If your LLC hires employees in Texas, be prepared to adhere to employment laws and regulations, such as workers’ compensation insurance, unemployment insurance, and employee rights and protections.

Maintain a Physical Presence in Texas

Depending on your business’s nature, you may need to establish a physical presence in Texas, such as an office, storefront, or warehouse. Alternatively, consider utilizing virtual office services or coworking spaces to satisfy this requirement.

Eligibility Requirements for Registering a Foreign LLC in Texas

Before initiating the registration process, ensure that your LLC meets the following eligibility requirements:

1. Your LLC must be validly existing and in good standing in its original Certificate of Formation. 

Your LLC has complied with all the necessary regulations, tax requirements, and annual reporting in its home state.

2. Your LLC’s name must be unique and distinguishable from other registered business entities in Texas. 

In Texas, if you do not wish to file your Texas LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for about 120 days. You must file a name reservation application in the Texas Secretary of State to keep the name. 

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for a DBA (doing business as) in Texas. In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it.

You can check the availability of your desired business name by searching the Texas Comptroller of Public Accounts Taxable Entity Search‘s website or conducting a Business Name Search in Texas

Recommended: Embark on your entrepreneurial journey confidently and affordably with LegalZoom’s DBA service, the beacon that guides businesses to credible branding and comprehensive compliance. Discover how effortless success can truly be!

LegalZoom – ($99 + Filling Fees)

Why Register a Foreign LLC in Texas?

By registering a foreign LLC in Texas, you can legally operate your business, enforce contracts, and access the benefits of the market. This registration also ensures that your business complies with Texas laws and regulations, protecting your company from potential legal and financial penalties for operating without proper authorization. Registering as a foreign LLC in Texas offers various benefits:

  • Legal Compliance: Registering as a foreign LLC ensures your business complies with Texas’s laws and regulations. Failure to register may result in penalties, fines, and the inability to enforce contracts in the state’s courts.
  • Protection of Limited Liability: Registering your LLC in Texas helps maintain limited liability protection for the owners, shielding them from personal liability for the company’s debts and obligations.
  • Access to Local Markets: Registering as a foreign LLC allows your business to operate legally and access the markets within Texas. This can help expand your customer base, form partnerships, and increase revenue.
  • Reputation and Credibility: Foreign registration demonstrates that your business is in good standing and compliant with local regulations. This can enhance your company’s reputation and credibility with customers, suppliers, and partners in Texas.
  • Access to Local Resources: By registering as a foreign LLC in Texas, your business can benefit from local resources, such as state-specific grants, loans, or tax incentives tailored for businesses operating within the state.
  • Legal Representation: Registering as a foreign LLC requires you to designate a Registered Agent within Texas. The Registered Agent serves as a point of contact for receiving legal documents and notices, ensuring that your business knows any legal matters requiring attention.

Difference Between Foreign LLC and Domestic LLC

A local (domestic) LLC is formed and registered in the state where it primarily conducts its business. The process of setting up a domestic LLC involves filing Certificate of Formation with the Texas Secretary of State’s office in that state and adhering to the state-specific regulations and requirements for LLC formation.

On the other hand, a foreign LLC is an LLC originally formed in one state (its domestic state) but wants to conduct business in another state. To operate legally in the new state, the foreign LLC must register with the Texas Secretary of State’s office by filing an Application for Registration or a similar document. This registration process ensures that the foreign LLC complies with the new state’s laws and regulations.

Consequences of Not Registering a Foreign LLC in Texas

Failing to register your foreign LLC in Texas can result in several negative consequences, including legal and financial penalties, the inability to enforce contracts in Texas courts, and damage to your business’s reputation. By registering your foreign LLC and complying with Texas regulations, you can avoid these pitfalls and focus on growing your business.

Can a Non-U.S Citizen Operate a Foreign LLC in Texas?

A non-U.S. citizen can operate a foreign LLC in Texas. The United States generally allows non-U.S. citizens and non-residents to own and operate LLCs, including foreign LLCs registered to do business in a specific state. 

However, certain requirements and restrictions may vary depending on the state or type of business. For example, some states may require a foreign LLC to have a Registered Agent who is a resident of that state or a business entity authorized to do business in Texas, which can help manage legal and administrative tasks on behalf of the LLC.

A foreign LLC in the U.S. may have tax implications for non-U.S. citizens. It is advisable to consult with a tax professional or attorney to ensure compliance with U.S. and state tax laws.

FAQs

What is a foreign LLC in Texas?
It is a limited liability company incorporated in another state or country and conducting business in Texas.
Why would someone want to start a foreign LLC in Texas?
It provides limited liability protection to its owners and allows them to operate a business in Texas without physically being present in the state.
What steps do I need to follow to start a foreign LLC in Texas?
You need to register your foreign LLC with the Texas Secretary of State and obtain authorization to do business in the state.
How do I register my foreign LLC in Texas?
You need to file a Certificate of Formation and a Certificate of Authority with the Texas Secretary of State.
Can I register my foreign LLC online in Texas?
Yes, you can file your registration documents online on the Texas Secretary of State’s website.
What is the fee for registering my foreign LLC in Texas?
The fee for filing a Certificate of Formation is $750 and the fee for obtaining a Certificate of Authority is $750.
Is it necessary to have a registered agent in Texas for my foreign LLC?
Yes, your foreign LLC must have a registered agent with a physical address in Texas.
Can I act as my own registered agent for my foreign LLC in Texas?
Yes, you can act as your own registered agent if you have a physical address in Texas.
What is the role of a registered agent in Texas for a foreign LLC?
A registered agent receives legal and business documents on behalf of the foreign LLC in Texas.
Can I change my registered agent for my foreign LLC in Texas?
Yes, you can change your registered agent by filing a change of agent with the Texas Secretary of State.
How do I obtain a tax ID number for my foreign LLC in Texas?
You can obtain a tax ID number, also known as an Employer Identification Number (EIN), from the IRS website.
Do I need to register for taxes in Texas for my foreign LLC?
You need to register with the Texas Comptroller of Public Accounts if you have employees or if your business involves sales tax.
What is the franchise tax in Texas for a foreign LLC?
Franchise tax in Texas is a tax on the privilege of doing business in the state, and the rate varies depending on your filing method.
Do I need to file a Texas franchise tax report for my foreign LLC?
Yes, every LLC conducting business in Texas is required to file a franchise tax report each year.
What is the deadline for filing a Texas franchise tax report for a foreign LLC?
The annual franchise tax report is due by May 15th of each year.
What documents do I need to file a Texas franchise tax report for my foreign LLC?
You need to file Form 05-163 (Texas Franchise Tax Public Information Report) and Form 05-164 (Texas Franchise Tax Report).
Can I get an extension to file my Texas franchise tax report for my foreign LLC?
Yes, you can request an extension to file your franchise tax report by September 15th.
What is the penalty for late payment of franchise tax in Texas for a foreign LLC?
The penalty for late payment of Texas franchise tax is a 5% penalty plus an additional 0.5% for each month the payment is late.
Do I need to file a Texas sales tax report for my foreign LLC?
You need to file a Texas sales tax report if you sell taxable goods or services in the state.
Do I need a sales tax permit to sell in Texas under my foreign LLC?
Yes, you need a sales tax permit from the Texas Comptroller of Public Accounts to sell taxable goods or services.
Does my foreign LLC need to pay payroll taxes in Texas?
Yes, if you have employees in Texas, you need to pay payroll taxes, including federal and state income tax, Social Security, and Medicare.
What are the state-level payroll taxes my foreign LLC needs to pay to Texas?
You need to pay state unemployment tax and state income tax withholding to Texas.
Can foreigners own an LLC in Texas?
Yes, foreigners can own an LLC in Texas, but they may need to obtain certain visas to operate the business domestically.
Does my foreign LLC need to obtain a business license in Texas?
Some industries require licenses or permits in Texas, but the Texas Secretary of State does not handle business licensing.
Who can I contact for more information about starting a foreign LLC in Texas?
You can contact the Texas Secretary of State or consult an attorney or accountant for more information.
Can I operate my foreign LLC outside of Texas?
Yes, a foreign LLC can operate outside of Texas if it provides services to other states or countries.
Do I need to provide a Certificate of Good Standing from my home state when registering a foreign LLC in Texas?
Yes, you must provide a Certificate of Good Standing or similar document when registering a foreign LLC in Texas.
How long does it take to process a registration for a foreign LLC in Texas?
The processing time for foreign LLC registration in Texas can vary, but it usually takes 2-3 weeks from the date of filing.
What is a foreign LLC, and how do I start one in Texas?
A foreign LLC is a limited liability company created in a different state or country than the one it intends to operate in. To start a foreign LLC in Texas, you must file an application for registration with the Texas Secretary of State.
How do I choose a name for my foreign LLC in Texas?
Your name must be distinguishable from existing business names in the state to avoid confusion. You can check if your chosen name is available on the Texas Secretary of State website.
Do I need to have a registered agent in Texas when starting a foreign LLC?
Yes, every LLC must appoint a registered agent in Texas to receive legal notices and service of process and must have a Texas street address.
Can I be my LLC’s registered agent in Texas?
Yes, you can serve as a registered agent for your LLC as long as you have a Texas street address.
Can I complete the Foreign LLC registration process in Texas online?
Yes, you can file your LLC application online through the Texas Secretary of State’s website.
What kind of information do I need to provide when filing for my Foreign LLC in Texas?
You will need to provide various basic details about your LLC, such as the name, address, and contact information of your registered agent, among others.
How much does it cost to start a Foreign LLC in Texas?
The Texas Secretary of State currently charges $750 to file a Foreign LLC application.
How long does it take to process my Foreign LLC application in Texas?
Typically, it can take up to 10 business days to process your application, but expedited processing is available for an additional fee.
Do I need to obtain a tax ID number before starting my Foreign LLC in Texas?
Yes, you must obtain a Federal Employer Identification Number (EIN) from the IRS to operate an LLC in the US.
What are the annual taxes and fee requirements to successfully maintain an active Foreign LLC status in Texas?
Foreign LLCs must file an Annual Report, pay Texas’s yearly renewal fee, and file federal and state tax returns.
What are the restrictions placed on the kind of business activities of foreign LLCs in Texas?
A Foreign LLC in Texas has the right to conduct business activities, but the activities must not be restricted or controlled by a limited purpose assessment.
Do I have any annual filming obligation for LLC’s records in Texas?
A Foreign LLC’s annual filing obligation in Texas is just an annual report.
What documents do I need to start a Foreign LLC in Texas?
You’ll need to prepare an Authorization to Transact Business obtained from its home country/city, certified copy of the Foreign LLC’s original formation, and a Texas Registered Agent Acknowledgment.
Does Texas require insurance for Foreign LLC’s to operate?
No, Texas does not require insurance as part of the formation requirements.
Can I change my Foreign LLC’s address once I establish operations in Texas?
Yes, you can change your LLC’s address once registered with the Texas Secretary of State by filing an amendment of formation with the necessary changes.
Do I have to have the physical offices of my Foreign LLC located in Texas?
No, your Foreign LLC can operate within Texas without a physical office within the state; you must have a registered agent that resides within Texas.
How do I make changes to my Registered Agent information in Texas?
The Texas Secretary of State page offers ways to update your information online for the registered agent.
As a Foreign LLC, do I have franchise tax obligations laid out by the state of Texas?
Once a Foreign LLC is registered to transact its business in Texas, it has franchise tax obligations that it must fulfill.
Can I convert my Domestic LLC to a Foreign LLC by transferring operations to Texas?
To transfer a domestic LLC to Texas, it has to undergo a conversion process, and amendments have to be filed with the State Board.
I just moved to Texas; how do I start an LLC, and what should I do if I have a Foreign LLC?
You can either change from your foreign LLC or file a Texan LLC Division registration.
Can I change a registered agent of Texan LLC once registered?
Yes. Only a filing with the necessary form and necessary changes would replace the registered agent for your Texan LLC.
What are non-profit registration requirements in Texas?
A non-profit corporation or foreign non-profit corporation must register with the Texas Secretary of State and obtain a tax-exemption given by section 501(3)(c).
How do I file purpose or structure changes within my Foreign LLC after registration in Texas?
You should create a properly completed form reporting the changing information for any structure or intent altering changes and submit them to the office of the Secretary of State for debt issuance.
Is permission required to run charity walks or 5k races in honor of the Foreign LLC name in Texas?
Charitable walk / event accreditation must be admitted and accounted for with appropriate state-body one month before your initiative.
I’ve got an additional employee and wish to expand working capacity in Texas; do I need to file update articles in Texas?
No, this change would lead only in a disciplinary process update or regulatory review and would need you to update your business record conditions; the Texan Employment Commissioner copy must have records of any new hires.
Do Federal Charter law under Foreign LLC’s need to be followed in Texas | tax | licensing law?
Yes, Foreign LLCs operating in Texas no matter under which jurisdiction they were created need to comply with federal as well as state law.
Can Texas-authorized documents then be filed with the Secretary of State in Texas?
Yes, providing the correct document fee proposed standards for containing the desired information are adhered to by the corporation.
How does the State of Texans reports taxes breakdown for foreign industries?
The report detailing how you have consumed and spent your taxes will be delved in the annual report form.
Can I cancel a Foreign LLC registration that was initially created in a state external to Texas?
To terminate Foreign LLC operation in Texas, an article of termination reports update composes actionable items from the corporation.
Can Texas charge post-registration extra fees for upkeep of the LLC?
Yes, tax charges begin, including late filing or auditing if tax indices are informally breached within specific timeframes; informally filing encompasses failing to play applicable HUB state taxes.

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Conclusion

Expanding your LLC’s operations to Texas can provide valuable opportunities for growth and success. Understanding and adhering to the foreign LLC registration process and requirements ensure that your business remains in good standing and operates legally within Texas jurisdiction. Utilize the resources and assistance available through the Texas Secretary of State and consult with legal or financial professionals to help navigate the registration process and maintain compliance with all necessary regulations.

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