How to Form a Corporation in Texas

Step 1) Verify & Secure Brand Name

To secure and register your brand name it must not be too similar to another registered name or contain any restricted wording. To check if your ideal name is available, conduct a Business Entity Search through the state.

Your name also must contain the word “corporation,” “company,” “incorporated,” “limited” or an abbreviation of one of these terms. If needed, you can also file an Application for Reservation of an Entity Name form with the TX Sec. of State.

Filing Fee: $40

Quick Note: Before you commit 100% to a name, you may also want to check that there’s a decent URL available for your business. Use WEEBLY to search your options. If there’s a quality domain name for purchase, we advise buying it right away. Even if launching a business website isn’t on your radar right now, you might as well nail down a domain name that’ll make it easy for customers to find you!

Step 2) Appoint A Registered Agent

A Texas registered agent is essential. Their job is to receive and help process all critical business documents like tax forms, state filings, legal notifications, etc. Some requirements include:

• Must be a legal TX resident, or,
• A legal business entity registered in TX,
• Must have a physical street address.

You can hire a third-party service and pay up to $160/yr, or get an agent free of charge for one year by incorporating with IncFile or CorpNet.

Step 3) File Certificate Of Formation

Now that you’ve locked down a registered agent, make your corporation official by filing a Certificate of Formation with the Secretary of State. This document will disclose for the public record some basics of your brand, 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

Step 4) Get A Corporate Records Book

Think of this as the hard-copy record book where all critical corporate documents are kept, like your Certificate of Formation, bylaws, meeting minutes, stock certificate ledger, stock transfer documents, etc. It’s the ultimate company binder!

While they’re not legally required, having one is highly recommended for all serious business entities. We’re huge fans of corporate kits, which include gorgeous custom pieces, but you can also find a standard records binder at a nearby office supply store or on Amazon.

Step 5) Meet With Directors and Discuss Bylaws

Appoint at least 1 director who, among other things, will oversee your Texas corporation until the first shareholder meeting. Prepare an “Incorporator Statement” with complete names and addresses of each director and keep it in your records book.

As soon as you’re ready, conduct an initial meeting with your directors so you can:

• Appoint officers & discuss/create your corporate bylaws.
• Choose a bank & approve the issuance of stock certificates.
• Agree on a corporate seal and adopt official stock certificate form.
• Approve s-corp (opt.). Record minutes of meeting, have directors sign, then add to records book.

Step 6) Set Up A Corporate Bank Account

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

The first is that banks and lending institutions are offering tons of perks and incentives to businesses these days. There’s a lot of banks to choose from, though, so be sure to do your research and shop around local, state and national options.

The second is that syncing a single account with business accounting software will make managing your finances much easier and add a huge layer of protection from your personal accounts. To begin your research, check out our breakdown of our favorite business checking accounts.

Step 7) Handle Taxation & Licensing/Permits

To be 100% legally compliant in Texas, you need to fulfill all relevant local/state/federal tax and licensing requirements. Ideally you should work with an attorney or filing service.

That said, here are four resources to get started:

1. Get an EIN, or Employer Identification Number, free and easy through the IRS website.
2. Bookmark the Sec. of State’s SOSDirect website.
3. To form an S-Corp, submit Form 2553 with the IRS (you’ll need all directors’ signatures).
4. Consider using a professional business license research service to get all the heavy lifting done for you.

Need Help Incorporating?

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

– IncFile ($49 + state fee) for basic & quick incorporation.

– LegalZoom ($149 + state fee) for the most popular incorporation service available.