Do I Have To Register With Secretary Of State If We Have Ca Employees

Strange or Out-of-State Entities

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Observe: Businesses performing disaster- or emergency-related work: Certain out-of-country businesses who enter the land to perform disaster- or emergency-related work in this state during a disaster response period are exempt from the requirement to annals as a foreign entity pursuant to Chapter 112 of the Business & Commerce Code. If your out-of-state concern is exempt, y'all may choose to file a notification argument with the secretary of state. Delight meet Form 3901 (PDF) for out-of-state businesses and Grade 3902 (PDF) for affiliates of in-country businesses. All exemptions under Chapter 112 of the Business & Commerce Code cease at the cease of the disaster response flow. The secretary of state cannot advise you regarding whether your business qualifies for an exemption under Chapter 112.

For information regarding country tax issues for out-of-land businesses assisting with recovery, please run across the Texas Comptroller of Public Accounts website.

Whether an entity is domestic or foreign does not depend on the location of the master business office. Instead, it depends on where the entity was formed and what law governs its internal affairs. If an organization was formed nether, and the internal affairs are governed past, the laws of a jurisdiction other than Texas, the organization is a "foreign entity." We sometimes refer to strange entities as out-of-state entities to reinforce the concept that entities formed in other U.Due south. states are foreign entities, likewise as entities formed outside of the U.s.a..

Registration Requirements

Section 9.001 of the Texas Business Organizations Code ("BOC") requires the following types of foreign entities to file an application for registration with the Texas secretary of country if the entity is "transacting business organization" in Texas:

corporations;
express partnerships;
limited liability partnerships;
express liability companies;
business organisation 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, limited liability visitor, professional association, cooperative, or existent estate investment trust; and
any other foreign entity that affords limited liability nether the law of its jurisdiction of formation for any owner or fellow member.

Other laws or circumstances may also exist reasons for registration.

Section 201.102 of the Texas Finance Code requires an out-of-land financial establishment to register with the secretary of state before opening a branch or other office 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 state. HB 2503, passed in the 2011 Legislative Session, removes this requirement effective 09/01/2011.
Some banks will not practice business with an unregistered foreign entity, despite that BOC § 9.251 states that maintaining a bank account in this state is non, in and of itself, transacting business in Texas.

Proper noun Requirements

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

contains a recognized term of organization for the entity blazon every bit listed in sections 5.054 to 5.059 of the BOC;
does non contain whatsoever word or phrase that indicates or implies that the entity is engaged in a business organisation that the entity is non authorized to pursue; and
is available in Texas, that is, is distinguishable in the records of the secretarial assistant of state from the name of any existing domestic or strange filing entity, or any name reservation or registration filed with the secretary of state.

View our name availability rules.

Yous may request a preliminary name availability conclusion past calling (512) 463-5555 or past email.

Registration Under a Fictitious Name

If the entity'southward legal proper name does not meet the in a higher place requirements the entity must register in Texas under an causeless proper noun (d/b/a). This special blazon of assumed name is oftentimes referred to every bit a fictitious name.

A fictitious name is a special type of causeless proper name because, dissimilar other causeless names, a fictitious name must come across the in a higher place requirements.
A foreign entity that registers to transact business under a fictitious proper name is stating that the entity volition transact concern in Texas under that proper name. BOC § 9.004.
A strange entity registering under a fictitious proper name must file assumed proper name certificates with the secretary of state (Form 503 (Give-and-take 125kb, PDF 74kb)) and the appropriate county or counties.

Where to file assumed name certificates.

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

Determining Whether to Register

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

BOC § 9.251, which lists activities that are not considered transacting business;
Case police from Texas and other U.S. jurisdictions regarding strange qualification;
Texas Attorney General Opinions; and
Private attorneys familiar with corporate law.

Some other helpful resource may be the comptroller's Texas Nexus Questionnaire (PDF), used past the comptroller to decide if a strange entity is "doing business" in Texas for tax purposes.

The threshold level of activity required for a tax nexus is generally lower than the threshold level of activity that requires registration with the secretary of country.
Therefore, if the Texas Nexus Questionnaire results in a determination of "no nexus," the entity is probably not 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.
Remember that, for registration with the secretary of state, the Texas Nexus Questionnaire can be a useful tool, only does not give a definitive answer.

Don't forget that even if y'all make up one's mind that your entity is not transacting concern in Texas nether the BOC, you may need to register nether other law, such as the Insurance or Finance Codes.

No fellow member of the secretary of country staff can determine whether an entity is transacting business in Texas or needs to file an application for registration. Determining whether to register is a concern decision that may have taxation consequences, raise legal issues, or impact licensing from another agency or state lath.

Penalties for Not Registering

Failure to register can issue in penalties, including:

Inability to maintain an action, arrange, or proceeding in a Texas court until registration;
Injunction from transacting business in Texas;
Ceremonious penalty equal to all fees and taxes that would have been imposed if the entity had registered when first required; and
Belatedly filing fees owed to the secretary of country by an entity registering more than xc days after first transacting business in Texas.

How Exercise I Calculate My Late Filing Fees?

Tardily filing fees are determined by multiplying the number of whole or fractional calendar years that take passed since the engagement the entity initially transacted business 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.
Example: A for-profit corporation that has been transacting business in Texas since June i, 2007 would owe $3,000 in late filing fees if registering on December ane, 2010. The total fees due with the awarding for registration would therefore exist $three,750.

(The following entity types are not charged late fees for years prior to 2006: professional person corporations, professional associations, concern trusts, real manor investment trusts, and other foreign entities not required to annals under prior police force.)

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

Limitation of Belatedly Fees

If your entity will exist assessed more than five years of late penalties, and you meet certain criteria, you may request that the secretary of state limit the fees y'all owe. The secretarial assistant of state will cap the late fees at five years for an entity that (1) submits bear witness of an active correct to transact concern with the comptroller's office; and (2) certifies to the truth of the following statements:

The entity has satisfied all of its franchise, sales, and other revenue enhancement obligations with the Texas Comptroller of Public Accounts. Attach a screen print from the comptroller's office showing the entity has a condition of "active correct to transact business organisation".
The entity does not owe any other taxes, fees, or assessments that are administered past whatsoever other Texas state agency.
The entity has not received a letter from the Office of the Secretary of State regarding the need to submit an application for registration, or if it has received such a letter, it has responded to the secretarial assistant of country within 45 days.

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

Special Bug for Limited Liability Limited Partnerships (LLLPs)

A strange express liability limited partnership transacting business organization in Texas must apply for ii certificates of registration. An LLLP transacting business organisation in Texas must register as both a limited partnership and equally a express liability partnership.

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

Other Issues for Foreign Entities in Texas

Texas Taxes

If an entity has failed to file franchise tax 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 Agreement.
Overview of Taxes Collected past the Texas Comptroller of Public Accounts
- Sales Tax
- Franchise Tax
Unemployment Tax Collected by the Texas Workforce Commission

Permits and Licenses

In that location is no general business license in Texas; however, depending upon the type of business organisation the entity engages in, additional licensing requirements from other Texas agencies might use.

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

Employer Issues

Texas Workforce Committee: Information on requirements when you lot have Texas employees.
Texas Department of Insurance: Data near the Texas workers' bounty system.
Texas Attorney General Employer Information Center: Information about employer new rent and termination reporting requirements.