If you own a Delaware Limited Liability Company (LLC) and want to start doing business in Texas, you might have questions. Can a Delaware LLC do business in Texas? Absolutely, but there are some steps you need to follow first. This process is called foreign qualification.
Foreign qualification may seem challenging, but in this comprehensive guide, we’ll break down how you can qualify a Delaware LLC to do business in Texas.
Can a Delaware LLC Do Business in Texas?
Yes, a Delaware LLC can indeed operate in Texas. However, the company needs to complete a foreign qualification in Texas. Foreign qualification is the process that an LLC or corporation must follow to register to operate in another state.
When Does a Delaware LLC Need to Register in Texas?
Let’s explore when your Delaware LLC might need to register in Texas. Simply put, if your Delaware LLC plans to conduct business in Texas, you will have to go through the foreign qualification.
Here are some instances where a Delaware LLC would need to register in Texas:
- Setting up an Office in Texas: If you plan on opening a store or office in Texas, completing foreign qualification is a must.
- Serving Texas Customers: Planning to sell products or services to Texas residents? You will need to register your Delaware LLC in the state.
- Hiring Employees in Texas: If you intend to employ people in Texas for your Delaware LLC, you need to qualify the company in Texas first.
- Buying Property in Texas: Buying property or other substantial assets in Texas means your Delaware LLC is conducting business there.
In general, if your Delaware LLC has any plans to operate in Texas, a foreign qualification in Texas is required.
How to Register Your Delaware LLC in Texas
Follow these steps to register a Delaware LLC to do business in Texas:
Step 1.) Complete an Application:
First, you need to fill out and submit an “Application for Registration of a Foreign LLC” to the Texas Secretary of State’s office. This is Texas’s term for the foreign qualification form.
To complete the Application for Registration of a Foreign LLC, you’ll need to provide:
- The LLC’s name;
- The home state of the LLC (Delaware in this case);
- The date the LLC was created;
- The LLC’s business purpose;
- The names and addresses of governing persons (LLC Members and Managers); and,
- The registered agent address of the LLC in Texas.
Step 2.) Get a Delaware Certificate of Good Standing
You will need to include a Delaware Certificate of Good Standing with your foreign qualification in Texas. A Delaware Registered Agent, like IncNow®, can assist you with getting a Good Standing Certificate from the Delaware Secretary of State.
Step 3.) Hire a Registered Agent in Texas:
Like other states, Texas mandates foreign entities, including Delaware LLCs, to have a Registered Agent in Texas. A Texas Registered Agent must have an actual Texas address to receive legal notices and documents for your Delaware LLC.
If your business lacks an address in Texas, you’ll need to hire a Texas Registered Agent service to act as your agent.
Why Does a Delaware LLC Need To Register in Texas?
Every U.S. state, including Texas, has unique rules for business entities like LLCs. Therefore, even if your company is organized and registered in Delaware, compliance with Texas’s laws is essential if you plan to operate there. This explains the importance of foreign qualification, ensuring your company can legally function in another state.
What Does It Cost to Register in Texas?
Registering a Delaware LLC in Texas comes with some costs, including:
- Texas State Filing Fee: The fee Texas requires to process your foreign qualification.
- Registered Agent Fee: You’ll pay a fee if you use a professional registered agent service in Texas.
- Delaware Certificate of Good Standing: IncNow® can assist you in obtaining a Delaware Certificate of Good Standing for $99.
What If I Don’t Qualify My Delaware LLC in Texas?
Failing to qualify your Delaware LLC in Texas may result in significant fines and penalties.
Foreign qualification is a critical step for Delaware companies looking to branch out into Texas or other states. While it involves some documentation and costs, fulfilling this requirement is vital to avoid penalties.
Always consult a professional if you need clarification regarding foreign qualification or your company’s legal needs. We hope this guide has simplified the process of qualifying your Delaware LLC in Texas. Remember, complying with the laws and regulations is an essential part of the success of your business.