Foreign Entity
Any entity formed under the laws of a jurisdiction other than Texas. A foreign entity must register with the Texas Secretary of State before "transacting business" in Texas.
A "foreign entity" under Texas law is any entity (corporation, LLC, limited partnership, business trust, or similar entity) formed under the laws of a jurisdiction other than Texas. A foreign entity must register with the Texas Secretary of State before "transacting business" in Texas.
Registration requirement
Under § 9.001, a foreign filing entity must register if it transacts business in Texas. The registration fee is $750 for most for-profit entities and $25 for nonprofit corporations.
"Transacting business"
Texas does not define the term. Under § 9.251, sixteen activities are excluded, among them, maintaining bank accounts, holding internal-affairs meetings, owning passive real estate, isolated transactions completed within 30 days, and selling through independent contractors. The general principle: regular and continuous Texas business activity (offices, employees, regular contracting) requires registration; isolated or passive activity does not.
Penalties for failure to register
Under §§ 9.051–9.054, a foreign entity that fails to register: (1) cannot maintain an action, suit, or proceeding in any Texas court until registered; (2) is subject to a civil penalty equal to all fees and taxes that would have been imposed; (3) may be enjoined from transacting business by the Texas Attorney General; and (4) is subject to a late-filing fee equal to the registration fee for each year (or portion) of unregistered transacting. The validity of contracts and other acts is unaffected by failure to register.
Internal affairs
A foreign entity's internal affairs (governance, fiduciary duties, owner rights) are governed by the law of its jurisdiction of formation, not Texas law. § 1.105.
The "transacting business" threshold is intentionally fact-intensive. Many out-of-state businesses operate in Texas without registering and without consequence, but litigation triggers the registration question, and the inability to maintain a Texas suit is a meaningful penalty for plaintiffs. Pro-active registration is the safer path for any meaningful Texas operation.