Expanding a European business to the US: Latest trends

Cyprus and many EU countries are home to multi-national corporations. Many are always expanding in different directions, including to open up in the US. It is no secret that the TESLA giant made a bold move from California to Texas, so what is there to know about doing business in Texas?

The LLC (limited liability company) has a simple and adaptable business structure that is perfect for many small businesses. Owners of an LLC can take advantage of tax benefits, management flexibility and minimal recordkeeping requirements. According to TRUiC, the information authority on startups, starting an LLC in Texas can be done with a few simple steps. 

Name Your LLC

A few guidelines apply when selecting a name for your business. It is important to keep in mind that the name must include the phrase “limited liability company,” or one of its abbreviations (LLC, L.L.C., Limited, Ltd, Company or Co.). Bearing in mind that the name should not contain words that may confuse your LLC with a government agency such as the FBI or Treasury. Additional paperwork and conditions may apply when using restricted words (Bank, University, Attorney) in the name. The Texas Secretary of State provides comprehensive guidelines in this regard. 

Registered Agent

After selecting the name for your LLC the next step would be to appoint a registered agent. Texas requires by law a registered agent for every formal business in the state. The registered agent receives official paperwork from the Texas Secretary of State and they also receive any service of process a business may be served with in the event of a lawsuit. They serve as a point of contact between the business and lawmakers. Owners or employees of a business have the option of being their own registered agents, as long as they are over 18 years of age and have a Texas street address. 

Why Use a Registered Agent Service

When choosing to use a registered agent service considerations regarding compliance, privacy, discretion and flexibility heavily influence the selection of one.

When it comes to compliance the registered agent should maintain a compliance calendar and remind the entrepreneur when annual reports and other filings are due. They typically help with this process. Maintaining a compliance calendar will help the company avoid fines and keep it in good standing – an important aspect to maintain limited liability protection.

Privacy concerns step in when persons act as their own registered agent, as their address will be published publicly on the Texas Taxable Entity Search. Using a registered agent will help maintain privacy in this regard. With privacy comes the assumption of discretion. Receiving service of process for a lawsuit can be a sensitive situation that would need to be handled tactfully and registered agents can receive any service of process and other documents at their office and deliver it to the owner online. This helps to avoid any sticky situations where legal papers are served in the presence of employees.

When you are your own registered agent you must be able to avail yourself at all normal business hours. This applies to every working day of year. For many individuals this is not a viable option and having a registered agent service available affords them more flexibility in the hours and locations these individuals can work. Registered agent services run physical offices and employ their own staff to help take care of the paperwork. 

The hallmark of a good registered agent service is that they will store a digital copy of all your business documents. This is typically done on a convenient dashboard and facilitates the digital delivery of important business documents and service of process documents. 

Expanding Business

When planning on expanding your business into other states a registered agent is necessary. LLC’s that expand beyond the state lines are considered “foreign” by all states, except the one that the LLC was founded in. It is important to register as a “foreign LLC” in any new states the business will operate in as failure to do so can incur financial penalties and have legal implications. 

Generally the corporate veil will protect LLC business owners from personal liabilities for the business debt. This protection can be negated, however. In some states the failure to file an annual report can result in automatic dissolution of the LLC. In such cases the owners no longer have limited liability protection and this highlights the necessary role registered agents play in helping to maintain the business entity’s good standing.