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Around the world, Delaware has been recognized as having the strongest corporate law structure. Business owners often form a Delaware company regardless of the state in which they are operating, due to the many advantages of forming in Delaware.
When operating in another state, such as Texas, business owners must register their company as a foreign entity. This process is called Foreign Qualification and it is typically the next step after forming a Delaware corporation.
The foreign registration is how Texas gives you the permission or authority to have a Delaware corporation doing business in Texas.
Texas, like most states, has a state fee and an application process in order to register your Delaware corporation there as a foreign entity. The document that you will receive back is called a Certificate of Authority. While Texas is one of the faster states to approve this registration, one mistake can delay the process and slow down business for the directors.
However, we have a Foreign Qualification department that files these applications every day. We will prepare your application, pay the state fees and file the document directly with Texas. Texas has different forms to be filed, depending on whether you have a for-profit corporation, a professional corporation or a non-profit corporation.
Unlike many other states, Texas does not require a Certificate of Good Standing from Delaware in order to register as a foreign entity in Texas.
Texas requires that the company has a Texas Registered Agent. We can act as the Registered Agent in Texas for you. Any legal documents, service of process or Franchise Tax notices will be sent directly to the Registered Agent. The Texas Registered Agent will not need to sign the application; however, please note that Texas will not allow you to list your own company as the Registered Agent.
Once the application is prepared, an authorized person will need to sign on behalf of the company. When listing an address for the Directors, Texas will allow you to use a P.O. Box rather than a home address if privacy issues are a concern.
Once your Delaware corporation is registered in Texas, you will be subject to a Texas state Franchise Tax. Franchise Tax and reporting requirements will be sent to the Registered Agent's address.
Texas does not require a corporation to file an annual report; instead, the state requires an information report. This is submitted when the Franchise Taxes are paid. This information report can be compared to a tax return, and can be quite complicated. Often clients will reach out to an accountant for assistance, or we can help you.
Our typical turnaround time to file a Delaware corporation for foreign qualification in Texas is two days. To start this process, or for any additional questions on operating a Delaware corporation in Texas, please call 1-800-345-2677, Ext. 6130.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
There are 3 comments left for A Delaware Corporation Doing Business in TexasBilal Ahmed said: Saturday, February 13, 2021
How much is the fees to file Texas as a foreign corporation? ThanksHBS Staff replied: Monday, February 15, 2021
Thank you for your question and for reading our artilce. We will send an email with all this information requested.Jose O Medina said: Thursday, August 9, 2018
I want to Create a LLC in Delaware and Operate my Business in TXHBS Staff replied: Friday, August 10, 2018
Hi Jose -- we'd be happy to help! Please contact our sales team at 800-345-2677 or use the live chat from our homepage and we can get started.Amit Parekh said: Saturday, May 12, 2018
Hi, I wanted to now the cost of the following 1 File Delaware corporation for foreign qualification in Texas 2 Certificate of Good Standing Thanks, AmitHBS Staff replied: Monday, May 14, 2018
We can help you do both of those. Call our office at 1-800-345-2677 or live chat with us via our homepage.