A foreign (out-of-state) professional limited liability company that is transacting business in Texas is required to file an application for registration with the Texas Secretary of State in accordance with Chapter 9 of the Texas Business Organizations Code.
The Secretary of State provides a form for the application for registration [Form 305]. Online filing of the application for registration is provided through SOSDirect.
There is no statutory definition of “transacting business”, however, Texas Business Organizations Code §9.251 lists activities that are not considered transacting business. Whether certain activities constitute “transacting business” in Texas is often difficult to answer. There are numerous cases, and a few Attorney General Opinions, which are useful in determining whether or not the entity’s activities in the state require registration.
The Secretary of State, however, does not issue opinions on whether an entity is transacting business and needs to register. Although an out-of-state limited liability company may engage in certain limited activities without being deemed to be “transacting business” for purposes of registering with the Secretary of State, the nexus required for taxation is less than that required for registration purposes. Therefore, an entity may be doing business in Texas for purposes of taxation, but not considered transacting business for purposes of registration.
If you need assistance in making a determination, the Comptroller of Public Accounts has a questionnaire regarding an entity’s activity in Texas. Based on the answers to the questionnaire, the Comptroller will issue an opinion about whether the limited liability company is doing business in Texas for franchise tax purposes. This determination also is an effective indication for purposes of filing an application for registration.
- Visit the Secretary of State Web site for forms and other filing information.
- File and search business documents online using SOSDirect.
- Read the Texas Business Organizations Code to learn about transacting business in Texas as a foreign limited liability company.
- Limited Liability Companies doing business in Texas are subject to franchise tax and should submit form AP-114, Texas Nexus Questionnaire to the Comptroller of Public Accounts.
- Find forms, publications, frequently asked questions, and the Franchise Tax Code on the Comptroller Web site.
- Read more about sales tax and other Texas business tax responsibilities.