No. Texas businesses are not legally mandated to obtain a certificate of fact. However, there are certain circumstances or reasons why a business in Texas might want to obtain one. The Certificate of Fact may be referred to as a Good Standing Certificate or Certificate of Status.
In Texas, this certificate validates that an entity is registered to conduct business in the state and is in compliance with all necessary corporate rules and licensing requirements, and has not been suspended by the state taxing authority.
What is a Certificate of Fact?
A Certificate of Fact is a certificate you can request from the Texas Secretary of State that certifies that your business entity was formed and is still in existence in Texas. Note that you may be asked to make available a Certificate of Fact for your business entity by third parties from time to time.
While you do not really need to have a Certificate of Fact for your business, there may be situations where one can be requested. You may need a Certificate of Fact if you are involved in a merger or acquisition, or if you are looking to buy a company or even sell your company.
Note that the Certificate of Fact will be included in the entity’s legal documentation. Aside from that, you may need this certificate if you are looking to apply for a business loan or line of credit. Another viable reason for a Certificate of Existence is to register to do business in another state.
You will have to determine your full documentation requirements, including expirations. If you are registered to do business in Texas, you may be required to prove this formally for certain business or legal reasons.
The Certificate of Fact is a document issued by the state to confirm that you are in compliance with all state requirements. If one is ever requested, it will have to be dated within a specific timeframe in order to be effective. As a result, you will need to obtain a new Certificate of Fact at the time of the request.
Steps to Obtain a Certificate of Fact in Texas
A Certificate of Fact can contain a wide range of information, depending on your specific request. To obtain this certificate in Texas, here are the necessary steps to take;
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First Ensure That Your Texas Business is Compliant
This is genuinely the first thing to do when looking to obtain a certificate of Fact in Texas. Note to be eligible for a Texas certificate of fact, your business will first have to be up-to-date with state compliance requirements:
- Licenses & Permits: To carry out business in the state of Texas, you are expected to comply with federal, state, and local licensing guidelines. This may include regulations such as health permits and building permits. You can find out more about state licensing requirements on the State of Texas website.
- State Taxes: While this will most often depend on your business activity, you may have to register for various forms of state tax in Texas.
This may include sales tax or Unemployment Insurance (UI) tax. Although the state of Texas does not have a state withholding tax, have it in mind that Texas LLCs and corporations are expected to pay a franchise tax along with their annual report.
- Annual Reports: Taxable entities such as LLCs and corporations are expected to file an annual franchise tax report. Note that this report validates or updates company information (such as your principal mailing address, registered agent, and company officers, owners, or members).
Your entity will also pay franchise taxes, if any are owed, as part of the filing. Note that your inability to meet filing deadlines will result in your LLC being deemed not in good standing, and if corrective actions are not taken, it may be classified as inactive.
Order Your Texas Certificate of Fact
After you must have ascertained that your business is compliant with the state, you can request a Texas certificate of fact from the Secretary of State. This can be done online, by mail, email, or by phone.
- Online: Just visit the website of the Texas Secretary of State and follow the instructions provided to sign up, search and print a certificate. You will be able to authenticate, view and print the certificate yourself right away. Your request will be processed and emailed to you usually within 1-2 hours in pdf format.
- By Mail: Requests by mail will be expedited only if you pay the extra fees and specifically request them. You will also be asked to provide the business name, payment, return address information, specific request, and a daytime phone number for any questions.
- By Fax: You will be expected to provide the business name, specific request, and a daytime phone number for any questions on a normal fax cover sheet. You can request they fax the certificate back to you; howbeit, note there is an additional charge of $10 for expedited service coupled with $2 per page for return fax service. They will bill you for the required fees.
- By Email: You will also need to provide the business name and a daytime phone number for any questions in your email. You can request they fax the certificate back to you; howbeit, don’t forget that there is an extra charge of $10 for expedited service plus $2 per page for return fax service.
- By Phone: You can use this medium to make your request and they can give you a specific timeframe for processing. You will also be expected to provide your business name and credit card handy when making your call.
- In Person: An additional $10 fee is necessary for counter service and is considered expedited processing. Requested documents can usually be provided within 2-3 hours. You will want to have your payment handy.
How Much Does A Texas Certificate Of Fact Cost?
The fees for a Texas taxable business are as follows:
- $15 online processing.
- $15 for normal processing.
- $25 for expedited and counter-service processing.
- $25 for normal processing (long form only).
- $2 per page for return fax service.
How Long Does It Take To Get A Certificate Of Fact in Texas?
- Online processing: 1-2 business hours.
- Normal processing: 1-2 business days, plus additional time for mailing.
- Expedited processing: same business day, plus additional time for mailing.
- Expedited Counter Service: within 2-3 hours (in person only).
Have it in mind that your business will have to comply with the Texas state law to obtain a Texas Certificate of Fact. You will have to check with the Comptroller of Public Accounts to ascertain that your company filed its annual franchise tax report and paid all necessary taxes due. In addition, reach out to the Secretary of State’s office to verify that it has all the necessary documentation.