Doing Business

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Doing Business is a term used when an out-of-state entity operates in a state extensively enough to where they can be subject to that state’s jurisdiction. It is often found in states’ long-arm statutes.  

For example, in Texas, Texas Civil Practice and Remedies Code Section 17.042, the Texas long-arm statute, allows Texas courts to exercise jurisdiction over anyone doing business in Texas. It states that an entity is “doing business” when “in addition to other acts that may constitute doing business. . . a nonresident (1) contracts by mail or otherwise with a Texas resident and either party is to perform the contract in whole or in part in this state; (2) commits a tort in whole or in part in this state; or (3) recruits Texas residents, directly or through an intermediary located in this state, for employment inside or outside this state.” The Texas Supreme Court in Schlobohm v. Schapiro further illustrated what it means to be doing business under this statute when it found that a Pennsylvanian man who invested in a Texas company, became its president, and loaned the company money was engaged in “other acts that may constitute doing business,” even though his actions did not squarely fit into one of the three enumerated categories.  

[Last updated in October of 2021 by the Wex Definitions Team]