Legal Definitions - doing business

Doing business refers to when a company or individual operates in a state to an extent that they can be subject to that state's jurisdiction. This term is often used in states' long-arm statutes, which allow courts to exercise jurisdiction over out-of-state entities that are doing business in the state.

For example, in Texas, the long-arm statute allows Texas courts to exercise jurisdiction over anyone doing business in Texas. This includes nonresidents who:

• Contract with a Texas resident and either party is to perform the contract in whole or in part in Texas
• Commit a tort (a civil wrong) in whole or in part in Texas
• Recruit Texas residents for employment inside or outside of Texas

An example of doing business in Texas would be a company based in California that contracts with a Texas resident to provide services in Texas. If a dispute arises, the Texas courts would have jurisdiction over the California company because it is doing business in Texas.

Another example would be a New York resident who commits a tort in Texas, such as causing a car accident while driving through the state. The Texas courts would have jurisdiction over the New York resident because they are doing business in Texas by committing a tort there.

The Texas Supreme Court has also found that "other acts that may constitute doing business" can include investing in a Texas company, becoming its president, and loaning the company money. This illustrates that doing business can encompass a wide range of activities beyond the three enumerated categories in the long-arm statute.