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How To Incorporate In Texas
Forming a corporation in Texas is accomplished by filing a Certificate of Formation for a For-Profit Corporation (Form 201) with the Texas Secretary of State. There’s a $300 filing fee, and online filing is available through the Secretary of State’s SOSDirect website. You can also submit this form by mail, by fax or in person.
If you’re planning to incorporate on your own, our Quick Guide to Incorporating in Texas (a bit further down on this page) will take you through the necessary steps.
Or, let our expert registered agents at Independent Texas incorporate for you!
How Much Does Incorporating in Texas Cost?
The state filing fee for corporations is $300—and this doesn’t include the cost of any local or state licenses your business might need. Ouch.
Luckily, we charge a fraction of that amount to do the heavy lifting for you. With our $410 Texas Corporation service (which includes state fees), you get fast filing services, plus all the essentials you need to open up shop—from Texas registered agent service to a 60-day free trial of phone service. The only thing you don’t get? Annoyingly steep prices.
Our Incorporation Service
Our Texas Corporation
This package includes expert filing of your Certificate of Formation as well as a range of tools and features to help you manage your business.
- Certificate of Formation filing services
- Our Texas business address listed for every director and officer
- One (free!) month of Texas Registered Agent service, with all the perks
- 60 free days of Phone Service (a feature-packed virtual phone system for your business)
- Custom corporate bylaws and resolutions
- Secure corporate account where you can store and access vital company records
- Access to our dedicated phone support team
- Option to add an assumed name certificate (DBA) for $125. Just add “Trade Name Service’ inside your client portal after purchasing our business formation service.
When you sign up for our corporation formation services, you’ll be charged $410—and we’ll also enroll you in auto-pay to qualify you for our $7.99 Texas registered agent service. After your first free month of service, you’ll pay $7.99 every month, on the date you signed up. You can cancel your registered agent service anytime, with one click in your client account.
What is a Corporation?
A corporation is a legal business entity with a well-defined management structure. The corporation’s owners elect a board of directors to appoint officers and oversee operations. Most corporations also have shareholders, who hold common stock in the company.
Although the corporate structure was designed to accommodate numerous shareholders, a single person in Texas can also own and run a corporation, playing the part of director, officer and sole shareholder.
Like LLCs, corporations limit the liability of their owners. When you form a corporation, you create a completely separate legal entity that is liable for its own finances and actions. Operating your business as a corporation is an excellent way to protect your personal assets.
Why Form a Corporation in Texas?
Texas is one of the most business-friendly states—and this applies to its corporate entities too. Here are 2 big reasons to incorporate in Texas.
Texas has no corporate or personal income tax.
Although all corporations are required to pay federal tax at the entity level, the State of Texas does not impose a net income tax on its corporations. Texas also lacks a personal income tax, which means shareholders can keep more of their dividends. Texas does, however, have a business privilege tax—called the Texas Franchise Tax—but the threshold is fairly high ($1,230,000). If your annual corporate revenue is below this amount, your business won’t owe anything.
Texan corporations have no annual fees.
The only annual report that Texas corporations are required to file is the Texas Franchise Tax Public Information Report. This must be included with your Texas Franchise Tax Report each year. Fortunately, it’s free to file.
How to Incorporate
A Quick Guide
1. Choose a Name for Your Corporation
In order for your Certificate of Formation to be accepted, you’ll need to make sure your entity name is available in Texas, and that it contains one of the following words or abbreviations: company, incorporated, limited, Co., Corp., Inc., or Ltd.
Once you’ve decided on a name, do a Taxable Entity Search through the Texas Comptroller’s website, email email@example.com, or call (512) 463-5555 to do a preliminary name availability check.
You can also do an easy name search through SOSDirect, the Texas Secretary of State’s public database. There is a $1.00 fee per name search, and you’ll need to sign up for an account or request a temporary login in order to conduct the search.
2. Select A Texas Registered Agent
Your Texas registered agent is the official recipient of lawsuit notices, tax documents and other legal mail for your corporation. You can serve as your own Texas registered agent, enlist another member of your company, or go with a professional registered agent service.
The most important thing to remember is that your registered agent must keep regular business hours at a physical address in Texas. Failing to maintain these Texas registered agent requirements can result in an involuntary termination of your business entity by the State, according to Texas Business Organizations Code Sec. § 5.251.
With Independent Texas Registered Agent, you never have to worry about falling out of compliance, missing important legal mail or opening yourself up to junk mail by listing your home address on the Texas public record. We list our Austin address for every corporate officer and director, and scan your legal mail to your account the same day we receive it.
3. File Your Certification of Formation
Your Certificate of Formation for a For-Profit Corporation is the form that legally creates your Texas corporation. The cost to file this document is $300.
You’ll need to gather some information as you prepare to file this document, including your corporation’s name, registered agent/registered office address, the name and address of at least one director, and the number of authorized shares.
Online filing through the Texas SOS Direct website is the fastest method. On average, online filings are handled in 2 working days. There is an $8.10 credit card processing fee.
Alternatively, you can download the form you need from the Texas SOS website’s Business and Non-Profit Forms page, fill it out, and send it to:
Secretary of State
P.O. Box 13697
Austin, TX 78711
Consider hiring us to help you incorporate in the State of Texas. We meticulously prepare your paperwork and submit everything the TX SOS needs to approve your business within one working day. We also list our Texas business address for every director on your Certificate of Formation, so no home addresses are required.
4. Write Your Corporate Bylaws & Hold an Initial Meeting
Texas Business Organizations Code Sec. § 21.057 requires Texas corporations to hold an initial meeting. During this meeting, the board of directors will adopt corporate bylaws that describe the ownership of the corporation, and how the company will be managed.
You are not required to file these bylaws with any agency, but we recommend writing them early on so that the rights and obligations of shareholders, directors and corporate officers are clear from the start.
We provide custom corporate bylaws and initial resolutions for every Texas corporation we form, so you don’t have to start from scratch.
5. File Your BOI Report
A Beneficial Ownership Information report must be filed with the Financial Crimes Enforcement Network (FinCEN) within 30 days after your corporation has been formed.* If your corporation operates in a highly regulated sector like finance, there’s a chance your corporation will be exempt from this filing. However, the vast majority of corporations in the US must file a BOI report.
The BOI requirement goes into effect January 1, 2024. When filing you’ll have to submit information about your “beneficial owners,” which are those with a significant stake in your company. This could include the CEO, board members, or those with at least 25% ownership stock. Information about company applicants (the person who filed your LLC and the person who directed it be filed) is also required. Both must provide: full legal name, residential address, date of birth, and a copy of a photo ID.
* If your corporation was formed before January 1, 2024, you have until the start of 2025 to file your BOI report and don’t need company applicant information.
6. Prepare to Pay State & Federal Taxes
- Obtain an EIN (Federal Tax ID) We suggest applying for an EIN (employer identification number) from the IRS after your corporation has been approved. The IRS uses this federal tax ID to identify your business for tax purposes, and most banks will want to see your EIN before you open a bank account. You can also use your business’s EIN to file your Texas Franchise Tax report if you do not have an assigned tax ID from the Texas comptroller. If you hire us to form your Texas LLC, you can add EIN service in our sign-up form and we’ll obtain one for you. Or, you can apply for an EIN through the IRS website. The IRS does not charge for this application.
- Register Online for a Sales and Use Tax Permit If your business provides taxable services, you will need to apply for a Sales Tax Permit through the Texas Comptroller’s website. As a Texas Sales and Use Tax Permit holder, you are required to collect sales tax on all taxable sales and report and pay this tax in a timely manner. In order to complete the application, you’ll need to provide a phone number and address, which will be published in the Texas Comptroller’s public record. When you hire us to form your corporation or serve as your Texas registered agent, you can list our business address instead of your own.
- File the Texas Franchise Tax Report Annually Each business entity in Texas must submit an annual Texas Franchise Tax Report. The report is due on May 15 each year. If your revenue is below the threshold ($1,230,000), your corporation won’t owe any tax—but you’ll still need to submit a No Tax Due Report / Public Information Report to the Comptroller in order to remain in good standing. As part of our Texas registered agent service, we send you helpful reminders as the Franchise Tax due date approaches. For a small fee, you can also hire us to complete the Information Report for you. Learn More About the Texas Franchise Tax
7. Open a Corporate Bank Account
The next step in establishing your Texas corporation as a separate entity is to open a business bank account. This account will allow you to keep your business transactions (and those of your fellow members) separate from your personal finances. You’ll be able to pay your staff with this account, take in profits and purchase company-related goods and services.
Texas banks will generally need to see these documents to open a corporate business account:
- Certificate of Formation
- Business License (if your company needs one)
- Federal Tax ID (EIN)
- Corporate Resolution (this states who is authorized to open the account and sign checks)
8. Get HUB Certified
Women and minority-owned businesses in Texas can apply for certification as a Historically Underutilized Business (HUB). This certification is free, though it does require a bit of legwork. HUB certification enables your Texas business to be listed on the Texas Procurement and Support Services (TPASS) HUB Directory.
State agencies use the HUB Directory—along with the Centralized Master Bidder’s List (CMBL)—to seek out bids from certified HUB vendors. From catering companies to cleaning services, the HUB program applies to all types of businesses.
In order to have your vendor profile added to the HUB directory, you must submit an original, signed, notarized HUB application to TPASS, along with supporting documentation. The first step, though, is completing a vendor profile on the Texas Comptroller’s website.
For more information, check out the Texas Comptroller’s page on How to Register as a Texas Vendor or Texas State University’s HUB Outreach Program. You can also call the Comptroller’s HUB Local Line at 512-463-5872, or email StatewideHUBProgram@cpa.texas.gov.
Sign Up With Independent
Ready to throw your hat in the ring? Let Independent Texas Registered Agent help. We give you all the essentials you need to get started fast and keep your business running smoothly. Sign up today.