Texas Incorporation

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How to Incorporate in Texas

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If you’re looking to incorporate in Texas, you’re in the right place. This guide will help you file formation documents, get tax identification numbers, and set up your company records.


Paperwork Cost Time
  • Form 201: Certificate of Formation - For-Profit Corporation
  • Bylaws
  • IRS Form SS-4: Obtain an EIN
  • Form 2553: S-Corp Election, if desired
  • Incorporation: $300 + optional 2.7% credit card convenience fee
  • Incorporation: ~3-5 business days by mail or fax.

How to Incorporate in Texas

1 Choose a corporate structure

Incorporating means starting a corporation. If you want to form an LLC, please see "How to Form an LLC in Texas".

Is your corporation for-profit or not-for-profit? If you are starting a nonprofit, please see "How to Start a Non-Profit Organization in Texas".
This guide assumes you are creating a Texas for-profit business corporation. Texas professional corporations and close corporations have specific formation requirements.
C-Corp and S-Corp refer to taxation with the IRS, not to legal structures. Your corporation is taxed as a C-Corp unless you file an election to be taxed as an S-Corp (explained below).

2 Check Name Availability

The legal name of your corporation may not conflict with any other registered name. Check availability of your desired name by conducting a name search.

Name Search:
Secretary of State database search or call (512) 463-5555 or email corpinfo@sos.state.tx.us
Name Reservation:
Optional
Suffix:
The name of a corporation or foreign corporation must contain: (1) the word "company," "corporation," "incorporated," or "limited"; or (2) an abbreviation of one of those words. Texas Business Organizations Code §5.054
3 Appoint a Registered Agent

Identify the corporation’s Texas registered agent. This individual or company receives notice of lawsuit and other legal service for the corporation.

In Texas, effective January 1, 2010, a person designated as the registered agent of an entity must have consented, either in a written or electronic form, to serve as the registered agent.

4 File Texas Articles of Incorporation

File the articles of incorporation to create your corporation.

Agency:Texas Secretary of State - Corporations Section
Form: ACCESS PREMIUM DATA
Filing method: ACCESS PREMIUM DATA
Agency fee:

$300 + optional 2.7% credit card convenience fee

Turnaround: ACCESS PREMIUM DATA
Law:

Texas Statues - Business Organizations Code - Title 2: Corporations

Notes:
  • Submit original and one copy. The secretary will return evidence of filing and a file-stamped copy of the document.
  • A minimum of one director is required. The director must be a natural person and need not reside in Texas.
5 Establish Bylaws & Corporate Records

Your corporation must keep correct and complete books and records. Your filed articles of incorporation are the first document for your corporate records. Your corporation will generate many other official records such as bylaws, meeting minutes, and your EIN.

Office supplies intended for a corporation will help you stay organized and save time. Optionally, get a corporate record book, seal, and document templates.

Draft bylaws (potentially using a template) which is the governing document for the corporation. The bylaws may contain provisions for the regulation and management of the affairs of the corporation that are consistent with law and the corporation's certificate of formation (Tex. Bus. & Com. Code § 21.057). You will review and ratify the bylaws at your first board of directors meeting.

6 Appoint Initial Directors

The initial directors serve on the board until the annual meeting of shareholders (when directors are elected to the board). If the initial directors are not named in the articles of incorporation, they are appointed by the incorporator. The incorporator documents and signs this action for the corporate records.

7 Hold Organizational Meeting

Hold the organizational meeting of the incorporators or initial directors in compliance with Tex. Bus. & Com. Code § 21.059. "Not later than the third day before the date of the meeting, the directors or other persons calling the meeting shall send notice of the time and place of the meeting to each other director or person named in the certificate of formation." Keep minutes of this meeting.

The following state laws apply unless overridden by the organizational documents, where permissible.

Directors Officers
  • Number: One or more required.
  • Qualifications: None.
  • Quorum: Majority of directors, unless bylaws or articles of incorporations fix a different number. No less than one third.
  • As state in the bylaws.
8 Issue Stock Certificates

The owners may be issued stock certificates to serve as proof of ownership in the corporation. Remember to hold the first annual meeting of the shareholders (the owners of the corporation) according to bylaws and keep minutes of this meeting.

The following state laws apply unless overridden by the organizational documents, where permissible.

Shareholders Annual Shareholder Meeting
  • Qualifications: N/A
  • Stock Certificate: Required.
  • Voting Trusts Allowed: Yes.
  • Required: Yes.
  • Action by written consent: Not provided for in statute.
9 Get a Federal Employer Identification Number (EIN)

Your corporation must obtain an EIN regardless of whether it will hire employees.

Submit to:
Internal Revenue Service
http://www.irs.gov/
Form:
IRS Form SS-4
Guidance:
IRS Pub 1635: Understanding Your EIN
Filing Method:
Mail, phone, fax, or apply online with the IRS
Fee:
$0
Turnaround:
Immediately online
Notes:
The IRS website is only available during certain hours. Print your EIN before closing your session.
10 Get Texas State Tax Identification Numbers/Accounts

The Texas Comptroller oversees collection of more than 60 state and local taxes, fees, and assessments. They do not offer a consolidated application. Apply for individual tax accounts / licenses / permits as required.

Guidance:
Overview of Texas Taxes
Submit to:
Texas Taxes - Texas Comptroller of Public Accounts
http://www.window.state.tx.us/taxes/
Forms:
Texas Tax Forms
Filing Method:
Mail or online with WebFile
Fee:
Varies based on tax accounts/licenses/permits required.
11 Consider Electing S-Corp Taxation

By default, your corporation is taxed as a C-Corporation. Some corporations, especially smaller ones, benefit from electing S-Corp tax treatment:

  • C-Corps suffer from double taxation: the corporation pays taxes on profits then members pay taxes on their distributions. If profits exceed $250,000 per owner, you provide employee benefits, or you will re-invest most of your profit in the business, you may benefit from the low tax rates on retained earnings under C-Corp treatment.
  • S-Corp treatment avoids double-taxation. It is generally the best choice for small businesses. To accomplish this, file Form 2553: S-Corp Election with the IRS.
12 Obtain Business Licenses & Permits

To run your business legally, you must obtain applicable licenses and permits. The easiest way to navigate the wide range of federal, state, and local requirements is to search by your business type and locality using the Small Business Administration Business License & Permit look-up tool.

13 Ongoing Filings to Maintain Your Corporation

You must file federal and state tax returns. You must also file:

  • Texas corporations are required to file a Texas Public Information Report when they file their annual franchise tax with the Texas Comptroller of Public Accounts. There is no separate submission to the Texas Secretary of State.

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