Texas Foreign Corporation Law

Corporations – Foreign Corporation – Texas

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STATUTORY REFERENCES

TEXAS BUSINESS CORPORATION ACT, Articles 8.01 through 8.18

A foreign corporation does not have the right to transact business in Texas until it has procured a certificate of authority so to do from the Secretary of State.

Without excluding other activities which may not constitute transacting business in Texas, a foreign corporation is not considered to be transacting business in Texas by reason of carrying on in Texas any one or more of the following activities:

(1) Maintaining or defending any action or suit or any administrative or arbitration proceedings, or effecting the settlement thereof or the settlement of claims or disputes to which it is a party;

(2) Holding meetings of its directors or shareholders or carrying on other activities concerning its internal affairs;

(3) Maintaining bank accounts;

(4) Maintaining offices or agencies for the transfer, exchange, and registration of securities issued by it, or appointing and maintaining trustees or depositaries with relation to its securities;

(5) Voting the stock of any corporation which it has lawfully acquired;

(6) Effecting sales through independent contractors;

(7) Creating as borrower or lender, or acquiring, indebtedness or mortgages or other security interests in real or personal property.

(8) Securing or collecting debts due to it or enforcing any rights in property securing the same;

(9) Transacting any business in interstate commerce;

(10) Conducting an isolated transaction completed within a period of thirty (30) days and not in the course of a number of repeated transactions of like nature;

(11) Exercising the powers of executor or administrator of the estate of a non-resident decedent under ancillary letters issued by a court of Texas, or exercising the powers of a trustee under the will of a non-resident decedent, or under a trust created by one or more non-residents of Texas, or by one or more foreign corporations, if the exercise of such powers, in any such case, will not involve activities which would be deemed to constitute the transacting of business in Texas in the case of a foreign corporation acting in its own right;

(12) Acquiring, in transactions outside Texas, or in interstate commerce, of debts secured by mortgages or liens on real or personal property in Texas, collecting or adjusting of principal and interest payments thereon, enforcing or adjusting any rights and property securing said debts, taking any actions necessary to preserve and protect the interest of the mortgagee in said security, or any combination of such transactions;

(13) Investing in or acquiring, in transactions outside of Texas, royalties and other non-operating mineral interests, and the execution of division orders, contracts of sale and other instruments incidental to the ownership of such non-operating mineral interests.

A foreign corporation which receives a certificate of authority, until its certificate of authority is revoked, enjoy the same, but no greater, rights and privileges as a domestic corporation organized for the purposes set forth in the application pursuant to which such certificate of authority is issued. The corporation and its officers and directors are subject to the same duties, restrictions, penalties, and liabilities imposed upon a domestic corporation of like character and its officers and directors.

No certificate of authority can be issued to a foreign corporation unless the corporate name of the foreign corporation:

(1) Shall contain the word “corporation,” “company,” “incorporated,” or “limited,” or shall contain an abbreviation of one of such words, or such corporation shall, for use in Texas, add at the end of its name one of such words or an abbreviation thereof.

(2) Shall not be the same as, or deceptively similar to, the name of any domestic corporation, limited partnership, or limited liability company existing under the laws of Texas or of any foreign corporation, limited partnership, or limited liability company authorized to transact business in Texas, or a name the exclusive right to which is, at the time, reserved or registered in the manner provided by law for the reservation or registration of names by a limited partnership or limited liability company. A name may be similar if written consent is obtained from the existing corporation, limited partnership, or limited liability company having the name deemed to be similar or the person for whom the name deemed to be similar is reserved or registered in the office of the Secretary of State.

The original and a copy of the application of the corporation for a certificate of authority must be delivered to the Secretary of State, together with a certificate issued by an authorized officer of the jurisdiction of the corporation’s incorporation evidencing its corporate existence.

Every foreign corporation authorized to transact business in Texas must have and continuously maintain in Texas:

(1) A registered office which may be, but need not be, the same as its place of business in Texas.

(2) A registered agent, which agent may be either an individual resident in Texas whose business office is identical with such registered office, or a domestic corporation, or a foreign corporation authorized to transact business in Texas, having a business office identical with such registered office.

No foreign corporation which is transacting, or has transacted, business in Texas without a certificate of authority IS be permitted to maintain any action, suit, or proceeding in any court of Texas (whether brought directly by the corporation or in the form of a derivative action by a shareholder) on any cause of action arising out of the transaction of business in Texas, until the corporation has obtained a certificate of authority. No action, suit, or proceeding on any cause of action may be maintained in any court of Texas by any successor, assignee, or legal representative of a foreign corporation until a certificate of authority has been obtained by the corporation or by a foreign corporation which has acquired all or substantially all of its assets.

The failure of a foreign corporation to obtain a certificate of authority to transact business in Texas does not impair the validity of any contract or act of the corporation and does not prevent the corporation from defending any action, suit or proceeding in any court of Texas.

A foreign corporation which transacts business in Texas without a certificate of authority shall be liable to Texas for the years or parts thereof during which it transacted business in Texas without a certificate of authority in an amount equal to all fees and franchise taxes which would have been imposed by law upon the corporation had it duly applied for and received a certificate of authority to transact business in Texas as required by law.

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