How to Form a Texas Corporation

Forming a Corporation in Texas is Easy

Forming a corporation in Texas is a simple process that is achieved by filing the Certificate of Formation with the Secretary of State. In the guide below, we will show you step-by-step how to start a corporation in Texas.

Step 1: Create a Name For Your Texas Corporation

When naming your corporation, you will need to:

• Follow Texas Name Requirements
• Complete a Name Search With the Texas Secretary of State
• Consider Securing a Domain Name (URL)

To learn more, read our How to Name a Business in Texas guide.

Need help naming your business? You can use our business name generator to find the best name for your corporation.

Name Requirements

First, you will need to choose a name that complies with Texas Secretary of State naming guidelines:

• Your name must contain the word “corporation,” “company,” “incorporated,” or “limited” or an abbreviation of one of these terms.
• Your name must be distinguishable from any existing business in the state. This includes Texas reserved names. We will help with this step in the search for your business name section below.

For a detailed list of all naming guidelines, visit the Texas Secretary of State Names of Entities page.

Name Search With the Texas Secretary of State

You will need to check name availability by searching the business name database on the Texas Secretary of State's website.

This tool is also useful if you decide to register an assumed name or DBA (Doing Business As) for your company. For detailed information about setting up a DBA for your Texas corporation, check out our How to File a DBA in Texas guide.

Name Reservation

If you have a name in mind, but aren’t ready to officially form your corporation, you can reserve your name. Your business name can be reserved for 120 days by filing a Name Reservation form with the Texas Secretary of State.

The Name Reservation form can be filed online on the Texas Secretary of State's SOSDirect website, or you can file the Name Reservation form by mail. There is a $40 fee to file your Texas Name Reservation.

Secure Domain Name

We recommend checking to see if your business name is available as a web domain (URL). Even if you don't plan to make a business website today, you may want to buy the web address in order to prevent others from acquiring it. It’s free to search.

After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

Step 2: Choose a Texas Registered Agent

When you file your Texas Certificate of Formation, you will be asked to give the name of your registered agent.

A registered agent is a person or entity that accepts tax and legal documents on behalf of an LLC or corporation. Your registered agent can be an individual resident of the state or a company that’s legally authorized to represent businesses in Texas.

To learn more about registered agents, read our What is a Registered Agent guide.

Complete the Texas Acceptance of Consent Form 401-A

Texas registered agents must consent to their appointment in written or electronic form.

The statement of consent should include:

• The name of the corporation
• An express statement that the person designated consents to serve as the corporation’s registered agent
• The name of the person designated as registered agent
• The signature of the registered agent
• The date of execution

The consent statement doesn't have to be filed with the Secretary of State. For in-depth information on the registered agent consent requirement, you can take a look at the Acceptance of Consent Form 401-A.

Step 3: Choose Your Texas Corporation’s Initial Directors

You must appoint at least one director who, among other things, will oversee your Texas corporation until the first shareholder meeting.

The directors of a corporation are in charge of the adoption, amendment, and repeal of the operational bylaws as well as the supervision, election, and removal of officers.

Later you will need to prepare an “Incorporator Statement” with complete names and addresses of each director and keep it in your corporate records book. For now, you only need one initial director to list on your Texas Certificate of Formation.

Step 4: File Form 201 - Texas Certificate of Formation

Now that you have chosen a registered agent and at least one director, it's time to make your corporation official by filing a Certificate of Formation form with the Texas Secretary of State. The Certificate of Formation is sometimes called the Articles of Incorporation.

The Certificate of Formation will disclose some basics of your business for the public record, including:

• Corporate name, address, and statement of purpose
• Corporate registered agent name, signature and address
• Number of shares corporation is allowed to issue
• Corporate officers and directors names and addresses
• Incorporator name and address

Filing Fee: $300

Filing Options

Submit your completed Texas Certificate of Formation Form 201 in duplicate, along with the filing fee, using one of three options:

Mail:
Texas Secretary of State
P.O. Box 13697
Austin, TX 78711-3697

Fax: (512) 463-5709
Use Form 807 for Faxed Credit Card Information

In-Person Delivery:
James Earl Rudder Office Building
1019 Brazos
Austin, TX 78701

Texas Corporation Operating Procedures and Housekeeping

Set Up a Corporate Records Book

Think of this as the hard-copy record book where all critical corporate documents are kept, like your Texas Certificate of Formation, bylaws, meeting minutes, stock certificate ledger, stock transfer documents, and etc.

You should keep the corporate records book at your principal location. Corporate records book kits can be purchased online, or you can use a large generic binder to store your records.

Prepare Bylaws for Your Texas Corporation

Bylaws are the rules that determine how your organization will be governed and run.

You can think about the bylaws as a constitution for your corporation. It makes the rules and priorities clear for everyone involved.

In your bylaws, be sure to include:

• How the corporation will be governed – the role of directors and officers
• How meetings are held, voting procedures, electing officers or directors
• How records will be kept and managed
• How disputes will be handled
• How bylaws will be added/amended in the future

NOTE: A corporation’s bylaws will supplement any rules set forth by the federal government or the state.

Ready to get started? Check out these bylaws templates which you can customize to suit the needs of your incorporated business.

Conduct Your First Board of Directors Meeting

An organizational meeting is the first official meeting of your corporation.

These are some of the things that are discussed in a typical organizational meeting:

• Taking attendance to show you have a quorum (minimum number needed)
• Appointing temporary officers, chairmen, secretary, etc.
• Adoption of the bylaws
• Adoption of conflict of interest policy

Don’t forget to record “minutes” of the meeting and have it signed by all attending directors. Here are some corporate minutes templates to help you get the ball rolling.

Protect Your Assets and Stay Compliant

In order to protect your assets and stay compliant after you start your Texas corporation, you will need to:

• Get an EIN
• Open a Business Bank Account
• Accounting For Your Corporation
• Research Business License Requirements

Get an EIN

The Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity. It is essentially a social security number for the company.

Why do I need an EIN? An EIN is required for the following:

• To open a business bank account for the company
• For Federal and State tax purposes
• To hire employees for the company

Where do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.

To learn more about EINs, read our What is an EIN guide.

Open a Bank Account For Your Texas Corporation

There are two critical reasons to open a unique corporate bank account.

The first is that separating your personal assets from your business assets adds another layer of protection in the event that your business is sued.

The second is that syncing a single account with business accounting software will make managing your finances much easier.

To begin your research, check out the breakdown of our favorite business checking accounts.

Accounting For Your Corporation

It's important to get your books in order, even if you haven't officially opened for business. A well-managed accounting system will help you:

• Track your business finances, including bills, expenses, and income.
• Simplify and file your annual taxes.

You can maintain your accounting in two ways:

• Use a DIY accounting software. This can come with an increased risk of errors especially when starting a new business.
• Hire an accounting service. They can provide comprehensive advice to help optimize your bookkeeping and taxes as well as additional services such as payroll etc.

Recommended: For most small businesses, we recommend using a reputable accounting service. Schedule a free tax consultation for your business now to avoid costly errors in the future.

Research Business License Requirements

To operate your corporation, you must comply with federal, state, and local government regulations. The details of business licenses and permits vary from state to state, so make sure to research carefully and plan accordingly.

Find out how to obtain necessary licenses and permits for your business or have a professional business licensing service do it for you:

• Federal: Use the U.S. Small Business Administration (SBA) guide.
• State: Use the Texas Secretary of State's website.
• Local: Contact your local county clerk and ask about local licenses and permits.

What is an S Corporation?

An S Corporation (S corp) is an incorporated business that is taxed as a pass-through entity. This means that S corps do not pay federal taxes on their business income. Instead, the business profits "pass-through" to the owners of the S corp, who are also known as shareholders. Then, the shareholders pay income tax and report their share of the profits in the form of salaries on their individual tax returns, which are then taxed.

In order to elect an S corporation status for tax purposes, corporations will need to file form 2553 Election by a Small Business Corporation. The form must be signed by all shareholders and must be filed within two months and 15 days after the start of the initial tax year.

To learn more, read our What is an S corporation guide.

Need Help Creating Your Texas Corporation?

Have a Professional Service Form Your Texas Corporation For You

If you'd prefer to have a reliable service help you incorporate in Texas, here are our top recommendations:

• ZenBusiness ($39 + state fee) for worry-free incorporation.
• LegalZoom ($149 + state fee) for the most popular incorporation service.

Quick Links

Texas SOS Corporation Forms

Texas SOS Business Structure Guide

Texas SOS Business FAQ

Texas Name Reservation FAQ