If you'd like to incorporate your business in Texas, you'll need to follow specific requirements. Find out what the requirements are for forming a corporation as well as some tips on what you'll need to begin the registration process.
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updated September 1, 2023 · 5min read
A corporation provides shareholders with limited liability for the corporation’s financial obligations. This means that creditors cannot pursue your personal assets to pay the corporation’s debts and obligations. Forming a corporation can also protect you personally from liability for your employees’ or business partners’ actions. Corporations can offer additional benefits, such as potential tax savings and increased appeal to investors, due to the facility to transfer ownership of shares.
Preparing your certificate of formation
To form a Texas corporation, you must file a certificate of formation with the Secretary of State and pay a filing fee. The corporation’s existence begins as soon as the certificate is filed unless the certificate specifies a different date. The certificate of formation may include many provisions, but it must contain the following:
In regard to stock structure, your certificate of formation must also contain the following information:
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Before you file your certificate of formation, you should check to see if the name you want for your corporation is available. You can do this by calling or emailing the Secretary of State’s office.
You can also reserve a name for your corporation for 120 days by filing an application with the Secretary of State. The reservation can be renewed for additional 120-day periods.
Your corporation’s name must meet the following requirements:
An organizer, sometimes called an incorporator, is the person who files the incorporation documents. Once the certificate of formation has been filed, the directors take over management of the corporation and the organizers have no further responsibilities.
The following requirements must be met when specifying organizers:
Corporate directors are responsible for managing the business and affairs of the corporation and exercising corporate powers. They may delegate some of these responsibilities to the officers or to committees.
You must meet the following requirements when specifying your corporation’s directors:
A registered agent is a person or entity that receives process on behalf of the corporation. “Process” refers to a lawsuit or other legal document. A registered office is a place where the agent can receive these documents. Every corporation must have both a registered agent and a registered office.
The following requirements apply when specifying your corporation’s registered agent and registered office:
To give you the greatest possible flexibility in operating your corporation, Texas law allows you to provide a general description of your corporation’s purpose. Texas uses this general language in its certificate of formation form: “The purpose for which the corporation is formed is for the transaction of any and all lawful business for which a for-profit corporation may be organized under the Texas Business Organizations Code.”
A corporation’s bylaws establish operating rules and procedures that the corporation and its officers, directors and shareholders will follow. Bylaws do not have to include any particular items, but they typically provide for the way officers and directors are chosen, the way meetings are held and the types of committees the corporation will have. Although bylaws are not filed with the Secretary of State, they should be kept on file at your place of business.
You must meet the following requirements when determining your corporation’s bylaws:
The Texas Secretary of State requires a fee when filing a certificate of formation or reserving a corporation name. Corporations are also required to pay state and federal income taxes.
Ready to start a corporation in Texas? LegalZoom can help you start a corporation online and find a registered agent in Texas.
by Jane Haskins, Esq.
Jane Haskins is a freelance writer who practiced law for 20 years. Jane has litigated a wide variety of business disp...
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