Is it needed to register a DE LLC in TX as foreign entity?

Question

If I am holding multiple properties in a DE LLC is it needed to register the entity as a foreign entity in texas?  I won't have any office or employees.   Thanks for your guidance

Stanley Bronstein · Answer

@Prashant Sheth  If your Delaware LLC is owning income producing property in the state of Texas then it should register as a foreign LLC in the state of Texas. If all it will do is own something like raw land, then it would potentially be optional (but still recommended).

@Greg H.  While it might not technically be required, no lender who does their proper due diligence will fund their loan on a Texas income producing property without the Delaware LLC that owns it registering in Texas. I've encountered this issue many times and the outcome is always the same.

Ronald Rohde · Answer

Yep

Stephanie P. · Answer

I'm not an attorney, but if you're trying to get a loan, we (and every other lender I know) would require the entire package of entity docs that would include foreign registry.

Greg H. · Answer

@Ronald Rohde

You are absolutely correct in that regard.  However, the OP never mentioned anything about borrowing money

Jon Allen · Answer

On AVVO the same question was asked by someone who owned 4 rental houses in Texas and the unanimous opinion of the responding attorneys was that renting out residential properties constitutes transacting business under Texas law and the entity should register as a foreign entity. One attorney went so far as to say that failure to register eliminates the individual liability protection otherwise provided by the entity, but I’m not convinced that’s correct. Regardless, if it were me I would register. Penalties can be assessed for failure to file.

Greg H. · Answer

Technically, it is not required to buy or sell property.  However, the issue is you will not be eligible to file a lawsuit if any legal issues arise

Wayne Brooks · Answer

It is likely required.  But more importantly, you couldn’t “conduct any business”....open bank accounts, file evictions, etc. without it.

Is it needed to register a DE LLC in TX as foreign entity?

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