What is Texas Corporation Foreign Qualification
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You want to do business in Texas but are registered as a Domestic Corporation in another state.
In order to legally conduct business in the state of Texas you must register with the Texas Secretary of State as
a Foreign Corporation.
The process of registering as a Foreign Corporation in Texas is called Texas Corporation Foreign Qualification.
The process of Texas Corporation Foreign Qualification is similar to the process of forming a Domestic Corporation in Texas.
Your original formation documents (usually called Articles of Incorporation) and Corporate Bylaws apply to your Texas Foreign Corporation.
The Board of Directors and Officers of your Domestic Corporation have the same roles in the Texas Foreign Corporation.
Specific requirements to qualify as a Foreign Corporation in Texas are explained below.
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Once you have made the decision to Qualify as a Foreign Corporation in Texas,
a Texas lawyer can file your documents and act as a middle man for a few hundred dollars an hour;
or you can use an online service provider like PCF to perform these services.
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Put the money you save with PCF right where it belongs - into your new
Texas Foreign Corporation
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What do I have to do to Qualify as a Foreign Corporation in Texas
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1. Prove that you are registered in a state other than Texas as a Domestic Corporation
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- PCF can get your Certificate of Existence as quickly as possible from any state
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In order to register as a Foreign Corporation in the state of Texas, you must first prove that you are registered in another state as a
Domestic Corporation.
You usually prove this with a Certificate of Good Standing, sometimes referred to as a Certificate of Existence or a Certificate of Fact, from the
state in which you are registered as a Domestic Corporation.
Cost of a Good Standing Certificate for your Domestic Corporation varies from state to state.
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2. Choose a name for your Texas Foreign Corporation
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- PCF will check to make sure that your Texas Foreign Corporation name is available, conforms to state of Texas
Corporation naming regulations, and will reserve the Foreign Corporation name with the Texas Secretary of State.
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Your Texas Foreign Corporation name can identify the type of products and services your business will provide;
or it may be the name of the founder; or it can be a combination of the two or something else.
In any case, the Texas Foreign Corporation name that you choose must be distinguishable from the name of any other registered Texas Corporation or other
business entity and the name must also be different from any reserved names on record with the state of Texas.
Your Texas Foreign Corporation name must not imply that it was formed for a purpose other than that stated in the
Articles of Incorporation for your Domestic Corporation
and your Texas Foreign Corporation name must not be a name that is likely to mislead the public.
The name of a Texas Corporation must include one of the following words: "Incorporated", "Corporation", or "Company"; or an abbreviation of one of these words.
Texas state law restricts the use of certain words and phrases in business names.
More specific information regarding Texas Corporation names may be found here.
It's important to choose a good name for your Texas Foreign Corporation because if you want to change it after you qualify you
will have to file amended documents with the Texas Secretary of State (and pay a fee).
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3. Select an official address and a Registered Agent for your Texas Foreign Corporation
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- PCF can act as the official Registered Agent for your Texas Foreign Corporation.
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Every Texas Foreign Corporation must have an address that is physically located in the state of Texas.
This address is "registered" with the Texas Secretary of State.
The Registered Address is where official and legal correspondence can be delivered.
The individual or company that is registered with the state of Texas to receive all correspondence on behalf of the Texas
Foreign Corporation is called a "Registered Agent".
You may act as your own Registered Agent, however, many Texas Foreign Corporations hire a Registered Agent because they don't have a physical
address within the state of Texas or to provide a distinct level of privacy.
PCF provides Registered Agent services in Texas as well as any other state.
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4. File Registration Documents with the Texas Secretary of State
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PCF can compile Registration Documents that are specific to your Texas business and file them with
the Texas Secretary of State.
Should the need arise, PCF can also draft and file amendments to your Registration Documents.
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In order to Qualify as a Foreign Corporation in Texas you must file Registration Documents with the Texas Secretary of State.
The Registration Documents must include certain specific information about your Texas business.
If the Registration Documents do not conform exactly to state of Texas requirements they will be rejected.
You may subsequently amend the Registration Documents for your Texas Foreign Corporation but you will have to pay a fee to
the state of Texas in order to make the changes official.
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What do I have to do after I form my Texas Foreign Corporation
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1. Obtain Business Licenses from the cities and counties in which you plan to do business
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The business licenses or permits that are required for your Texas Foreign Corporation vary depending on your specific business
activities and the Texas locations in which you want to conduct business.
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2. File the required reports for your Texas Foreign Corporation
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An Initial report must be filed with the Texas Secretary of State at most one year and 89 days after the date on which the Texas Corporation was authorized.
An Annual Report must be filed with the Texas Secretary of State each year.
In addition, a Public Information report must be filed each year with the Texas Comptroller, which will then be forwarded to the Secretary of State.
The Annual Report includes basic information about your Texas Foreign Corporation including information on your Board of Directors and Officers.
Failure to submit a properly completed Texas Annual Report to the Texas Secretary of State on or before the
due date may subject the Texas Foreign Corporation to being administratively dissolved in the state of Texas or having its authority to
transact business in the state of Texas revoked by the Texas Secretary of State.
Penalties may accrue if you fail to file any Texas Corporation Annual Report to the Texas Secretary of State by the due date.
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3. Keep proper records of your Texas Foreign Corporation on file
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Keep the following records on file and available at the principal business office of your Texas Foreign Corporation:
- Names and addresses of all Directors and Officers of the Texas Foreign Corporation
- Articles of Incorporation and any Amendments to them
- Corporate Bylaws and any Amendments to them
- List of current shareholders of the Foreign Texas Corporation.
If shareholders change, keep a record of old shareholders and how stock was transferred.
- Minutes of all Meetings of Shareholders and Directors
- Copies of any Corporate Resolutions which have been adopted by the Texas Foreign Corporation
- Copies of all tax returns and Annual Reports for the Texas Foreign Corporation for the last 3 years
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4. Pay your taxes to the state of Texas
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Foreign Corporations that either do business in the state of Texas or that derive income from sources within the state of Texas are subject to Texas
tax laws.
If you are engaged in intrastate business and derive income from other states besides Texas, you must allocate the amount of income derived
from the state of Texas in order to determine your Texas state taxes.
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