Foreign registration, also called out-of-state registration, is the process required for a company formed under the laws of one state doing business in another and requiring it to be registered in the other. Here’s a clear example: if you and your company are set up in New York, but want to do business in Texas, you may be required to complete foreign registration. Please note that these requirements may vary from state to state, but they tend to cover any and all business entities, from S-Corps to LLCs and even to trusts!
Here are just some of the requirements for foreign registration in Texas. You need to operate under a name that
- contains a recognized term of organization for the entity type (i.e. LLC, (S)LLC, LP, etc.)
- does not contain any word or phrase that indicates or implies that the entity is engaged in a business that the entity is not authorized to pursue; and
- is available in Texas, that is, is not the same as, deceptively similar to, or similar to the name of any existing domestic or foreign filing entity, or any name reservation or registration filed with the secretary of state. (Similar names are available with consent.)
You do have other options if you can’t meet those requirements, like registering your entity under a fictitious name, kind of like a legal “nom de plume.” That might sound like legal masquerading, but it’s by the book. Texas’s Secretary of State actually advises this course of action. Since there are serious penalties for not registering, you’ll want your out-of-state registration completed before doing business in a new state. And you don’t want to mess with late filing fees either, which can cost a pretty penny if you don’t set up your out-of-state registration correctly.
There are other nuances, which of course vary by state law. Don’t go it alone! For more information on how we can help you with your foreign or out-of-state registration, contact Royal Legal Solutions today. We’ll evaluate your situation and help you make the best choice for your circumstances. Give us a call, and we’ll set you up with a free consultation.