Registered my LLC in OK...can I use it to buy fix and flip in TX?

Question

Hello BP!

I have my LLC registered in Oklahoma as this was the first plan I was going to do fix and flip there. However, I moved to Dallas and was wondering if I need to set up a new LLC to be registered in TX to do fix and flip here in Dallas? Or Can I use my OK LLC to do business in Dallas?

For the tax purpose, what do you LLC experts recommend?

Thank you

Account Closed · Answer

Here's my understanding, but you should talk to a lawyer who practices in Texas:

If your entity is "transacting business" in Texas, you are required to file an application for registration with the Texas Secretary of State.  They don't define "transacting business," but flipping houses almost certainly qualifies.

You have 3 options:

1.  Register your Oklahoma LLC with the Texas SoS.  This is the simplest option as far as paperwork, but the registration fee is $750.  You still need to file your annual reports with the Oklahoma SoS, as well as complying with Texas requirements.

2.  Form a new LLC in Texas.  This is the cheapest option with respect to filing fees.  $300 filing fee.

3.  Convert your entity from an Oklahoma entity to a Texas entity.  This gives you the advantage of not having to file annual reports in Oklahoma anymore.  It will cost you two $300 filing fees and requires a bit of paperwork.  The Texas Business Organizations Code Section 10.103 explains how to do a plan of conversion.

Jon Holdman · Answer

Unless you've elected non-standard tax treatment your LLC is irrelevant for tax purposes.

You can register your OK LLC in TX as a foreign entity.  The costs is usually the same as creating a new LLC in TX.

Ari Yenjai · Answer

Thank you for your advice!!! @Jon Holdman Account Closed

I think I'll get with a lawyer in TX first and start a new LLC.

Do you guys happen to know any lawyers here in Dallas that you want to refer me to?

Account Closed · Answer

@Ari Yenjai

I sent you a PM with contact info for a good corporate lawyer in Dallas.

Jerry W. · Answer

It is usually best to form an LLC in the state where you plan to do business.  this saves on paperwork and expenses.  If you are planning to do flips you might consider doing a Sub S corporation.  Ask your accountant to explain the difference.

James Miller · Answer

Yes, but you'll have to register it in TX as a foreign LLC. Which is approximately an $800 fee to the secretary of state.

Registered my LLC in OK...can I use it to buy fix and flip in TX?

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