When to register a foreign LLC in Texas
If you have an LLC established outside of Texas and the LLC does business in Texas, you must file an "Application to Register Foreign LLC" (TXSOS Form 304) with the Texas Secretary of State within 90 days of the first business transaction in Texas.
All foreign LLCs are granted a 90 day grace period to register with the secretary of state after their first business transaction in Texas. Failure to register during the grace period will result in a financial penalty equal to the total amount of unpaid fees and taxes plus additional interest and late filing costs. However, missing the filing deadline will not void any significant legal agreements made in the state or prevent your LLC from defending a lawsuit in Texas.
What is a Foreign LLC?
A "foreign LLC" is the term used by one state to describe an LLC formed in another state. We sometimes refer to a foreign LLC as an out-of-state LLC. An LLC is considered "domestic" to the state in which it was formed and "foreign" to all other states.
The requirement that you register an LLC outside of its home/formation state ensures that the business will fulfill regulatory and tax obligations in every state in which they do business.
You can read more in our article titled "Foreign LLC vs Domestic LLC."
What activities require foreign LLC registration in Texas?
Ramifications for failure to register as a foreign LLC in Texas
An LLC formed outside of Texas may engage in certain limited activities in the state without being required to register (BOC § 9.251). However, a foreign LLC that fails to register when required to do so:
- may be enjoined from transacting business in Texas on application by the attorney general;
- may not maintain an action, suit, or proceeding in a court of this state until registered, and
- is subject to a civil penalty in an amount equal to all fees and taxes that would have been imposed if the entity had registered when first required.
Are there penalties for registering foreign LLC in Texas late?
Zachary Copp, Esq.
Mr. Copp is a graduate of the University of Texas at Austin and the founder of The Copp Law Firm. He has personally formed over 3,000 Texas LLCs since 2015 and was recognized as a Rising Star by SuperLawyers® for seven straight years. See full bio →