Texas Corporation

Texas does not have annual reports with the Secretary of State. However, it does have a gross receipts franchise tax report due every year. Texas has no personal income tax, thus it taxes its businesses fairly heavy, on their gross receipts.

Companies who pay over $10,000, must use the TexNet system to file electronically. You'll need to find your company on the website to pay. You can search for your name to find your 10-digit TX number. The most common form to file is the E-Z computation form # 05-169. This is the form to use if you have 10 million dollars or less of gross receipts. You can also file your franchise taxes via paper format.

The franchise tax report is due May 1st initially, and May 15th after that, every year. Initial reports are due within 1 year and 90 days from the entity organizing in Texas, or registering to do business in Texas. Most entities pay 1% of gross receipts minus COGS. Entities using the E-Z computation form will usually get .575% of their receipts (.00575). Basically, your first $300,000 of gross income will be tax free, and you won't have to pay any tax, but you still have to file. If you use the E-Z computation form, you can get about $434,000 tax-free.

Texas has a gross receipt tax of 1% on gross income over $1,000,000. You can use the E-Z computation form to get .575% tax if your sales are under 10 million a year. Wholesalers and retailers are automatically at .5% tax.

You must still file the tax return for informational purposes every May 15th. In 2009, Texas passed legislation to move the threshold of gross receipts from 300,000 to 1 million.

Most Texas businesses will not have to pay anything in tax on the company level or personally.

Texas has no personal income tax.

The average Texas sales tax rate is 7.39%. The State has a 6.25% tax, but the average local tax is 1.14%, making a total of 7.39%.

To form a Texas Corporation, you file Texas certificate of formation. The Texas certificate of formation cost $300.00 with the Texas Secretary of State. These can be basic or complicated. We custom draft your Texas certificate of formation when you hire Northwest to form your Texas business. The basic requirements are:

• The Texas Corporation must have a corporate ending such as INC, Incorporated, Corporation or a different variety.
• The Texas corporation name must be different than already registered Texas corporations.
• The name and office address of the registered agent in Texas. Consent is required.
• The name and address of the directors of the Texas Corporation.
• The number and value of shares the Texas Corporation is authorized to issue.
• The purpose of the Texas Corporation.
• Optional provisions.
• The name and address of the Texas organizer.
• Effectiveness of filing.
• The Texas organizer must sign and date the certificate of formation.

Texas does not require original signatures on filings. The file stamped copy will come back to the Texas Corporate agent or the return address on the envelope.

1. You file the certificate of formation for a Texas Corporation with the Texas Secretary of State.
   The certificate of formation must be submitted in duplicate, unless filing online.
2. You obtain a federal tax ID number with the IRS after you have confirmation from Texas that the certificate is completely filed.
3. You should be able to open a business banking account with these two items.
4. You register your Texas business with the Texas department of revenue if you're going to have employees or need to withhold sales tax.
5. You obtain a trade license if you actually need one. (Most businesses don't.)
6. You obtain a local City or County general license if you need one.
7. You obtain a local trade license if the City or County you're going to be working in requires it.
8. If you're going to have an office or shop you might need an approval from the City zoning for your type of business in that location.

NOW!! I always give out horrible advice at this point, and please don't take it as legal advice. It would be considered totally wrong and horrible legal advice. BUT… I always tell people, you could spend months worrying about getting your Texas business off the ground and registering with every Texas State agency you need to. At the end of the day, you need to pull the money in! That means, your idea, or your new service needs to get out there and get the sales, customers, or clients you need to get the money in the bank, and keep your business going. At the end of the day, Money in the bank trumps fines with some Texas government agency that you overlooked paying some silly fee to. The government is always going to be broke and always looking for the next way to make us pay a fee or tax. We unfortunately see Texas corporations every year that just shut down 6 to 7 months after they hired us to incorporate their Texas Corporation for them, because they never got the idea off the ground. I always say, pull the money in first, deal with a Texas State agency second. If you have to pay some late fees or fines, but you landed that first big client that gets your business off of the idea you have on that paper notebook, I say more power to you. Pay the late fee or fine with joy. You've done the REAL first step to starting your Texas business. Get out there and pull the money in! If some Texas State agency finds you're in some violation, they will send you a letter, and you can pay whatever they are asking for. It's a never-ending phone call or email I get hearing about all the effort someone's put into their website, into their letterhead, into their marketing, into their planning, and they haven't even figured out how they are realistically going to get and collect their first sale. Don't let over-planning stop your business from getting off the ground. Paying a Texas incorporation service like us to do the initial paperwork is a great way to keep your brain moving on the important items like pulling in the money and getting it into your new business bank account.

We pay taxes in Texas. We operate a corporation in Texas. We're not an incorporation website. We're an incorporation and registered agent Texas business. There's lots of websites out there that are just websites with generic domain names and smart programmers that can make them rank in Google.

Anyone could throw up a website, hire sales people to answer the phones with scripts, and pay a document filer $10.00 an hour to file the Texas certificate of formation with the State for you. If you've found this page by searching online, most the other sites you'll find don't operate in Texas, don't pay taxes in Texas, and generally speaking, don't have any idea what it's like in Texas. The only people here helping you form a Texas corporation are the owner, our in-house, non-practicing attorney, and our paralegal. This is all we do, and when you hire us and pay us $100.00 to form a Texas Corporation, the owner pays Texas tax at the end of the year off that $100.00, and the $125.00 Texas registered agent corporation service fees.

When we form a Texas Corporation, we'll be your Texas corporation agent. That means our Texas office is in Austin, Texas, and we have a physical presence in Texas, so we have to pay income tax off the money we derive from doing business in Texas. It's called "Nexus." If you're shopping around for a Texas incorporation service, we would challenge you to call one of our competitors and ask the person that answers the phone if they have nexus in Texas. If they don't, or don't have any idea what that word even means, that would be kind of like hiring a real estate agent in Wichita, Kansas, to sell your home in Dallas, Texas. Just doesn't sound right does it? If they do have nexus in Texas, then that's Great… At least you're then comparing us with another company that should know what they are doing, and you've ultimately done yourself a favor. While you're on the phone comparing apples to apples, you should ask the company what the name and address will be of the registered agent in Texas, and how much the renewal bill will be. If they can't tell you the name, the town the office will be in, and if it's not their own name, it means you're ultimately signing up with someone you don't know.

We've seen other sites with packages that include Texas Corporation agent service, or offer it free for 6 months or a year, or it's just built into a "Package." But you're paying a website, and they then list another company as your agent. Then you get a bill at the end of the 6 months or year from some random company you've never heard of for a lot of money. Our Texas registered agent corporation service is $125.00 a year, has no hidden weird fees, and the first year is included in our service to incorporate your Texas Corporation.

• 1 year of service from the time of hire.
• Annual report reminders.
• Annual report calendar in your online account to track your due dates.
• Online account for contact info, corporate documents, documents we receive on your behalf, annual report dates, calendar, and end of service dates.
• Any lawsuits or service of process are uploaded to your account immediately, in full, for your viewing. We can notify your attorney at the same time if you would like. We can notify up to 5 different people and your attorney of your lawsuit instantly.
• Added privacy and identity protection.
• All junk mail is shredded
• Same day complete scan of received documents. (Other registered agents forward items received locally to their National headquarters by mail, and then scan them. You get everything the same day with us.)
• No cancellation fees
• No forwarding fees
• We don't keep your credit card on file and automatically charge you for anything.

The requirements of a registered agent are being open during normal business hours for someone (A process server or Sheriff) to walk in and hand deliver a document or notification to you. Assigning someone, or a website you don't know to this role means that if you get a notification by mail or someone delivers a letter or a lawsuit to that person or business, its legal proof that you've been notified, regardless of if it actually gets to you. There are only 5 national registered agents, and there's thousands of Texas incorporating websites, so the odds are that if you pay one of the thousands of Texas incorporation websites, they've got a discounted referral fee plan to dump you on one of the national agents to collect a referral fee, and you'll be taking a big chance that the agent they list will get the documents they receive for you to the incorporation website, and then the incorporation website you hire will get it to you. Worse yet is if you're continually being billed from a national incorporation website you signed up with and they aren't the actual business or person that is listed as your registered agent. With us, you know who you're counting on from day one. As far as we know we are the only service that uploads complete documents instantly, from our local location to your account.

We will form a Texas corporation for you right away. No weird Texas corporation expedite packages. No weird tables with checkmarks showing what's included and what you're missing. Our sign up form is one page. After filling it out, our owner, our non-practicing attorney, or our paralegal will call you right away, go over everything with you, and we'll get your new Texas Company formed right away. We'll be listed as your Texas registered agent, not some random company you don't know. Most States have a change of agent fee, so not only could you be connected with a company you don't really know, it will cost you to get rid of them after you get a crazy renewal bill you weren't expecting. We make our living by keeping your business in compliance with Texas, year after year. Not off weird misleading one time package fees and up-sells.

Shouldn't you trust a Texas business that actually operates and pays taxes in Texas instead of a website with a 500 filing backlog that you have to upgrade a package with to get some quick attention?

If you want to form a Texas corporation yourself, you can just hire us as your Texas registered agent, and you'll instantly have the Texas forms to file and filing instructions on the quickest, cheapest, and most efficient way to incorporate a Texas Corporation. We also will look over your filing for free if you would like us to. You'll get the ongoing support of our online tools, reminders and the support of a professional Texas Corporation Agent service.