Start a Corporation in Texas
To start a corporation in Texas, you must file a Certificate of Formation with the Texas Secretary of State. You can file the document online, by mail or in person. The Certificate of Formation costs $300 to file. Once processed by the state, this document formally creates your Texas corporation. You can use our tool to fill out the Official Texas Certificate of Formation. You’ll even be able to download, print, or save your progress, all for free.
The best part is you only need to enter your information once to create a free account and pre-populate your Certificate of Formation, corporate bylaws, IRS filings, and ongoing annual filings to maintain your Texas corporation. You can use our free system to file with the state yourself or you can have us help you out along the way.
How to Start a Corporation in Texas
A Texas corporation is a type of business structure that enables its owners (shareholders) to establish their company as a separate legal entity. This separation protects the owners and their assets for any business debts or liabilities.
To start a corporation in Texas, you’ll need to do three things: appoint a registered agent, choose a name for your business, and file Certificate of Formation with the Texas Secretary of State. You can file this document online, by mail, fax, or in person. The certificate costs $300 to file. Once filed with the state, this document formally creates your Texas corporation.
Name Your Corporation
You’re going to need a name for your corporation. State law won’t let your corporate name be the same as, or similar to any other business name registered with the state. To find out if your preferred name is available, visit the Texas SOS Business Name Search. The name you choose must also follow other Texas naming laws. Your corporate name:
- Must an indicator such as “Corporation,” “Incorporated,” “Inc.,” “Corp.,” or similar word or abbreviation.
- Can’t include words, names, or abbreviations that may make your corporation sound like a different type of entity, like “limited liability company” or “LLC.”
- Can’t include the words “bank,” “bank and trust,” “trust,” “trust company” or a similar term unless accompanied by a “no objection” letter from the state Banking Commissioner.
Can I reserve a business name in Texas?
Yes. If you’ve got a great idea for a business name, but you aren’t ready to pull the trigger, Texas will let you reserve a name for up to 120 days. Just file an Application for Reservation or Renewal of Reservation of an Entity Name and pay the $40 filing fee.
What’s the difference between my corporate name and a DBA?
The legal name of your corporation is the one listed on your Certificate of Formation. A DBA is like a nickname for your business. For example, a company called Star Struck Used Books Inc., might also do business under the name “Rainbow Reading Corner.” Utilizing DBA can alleviate the hassle of creating a new business for each additional store you open, or help your corporation market to a specific audience.
Texas calls DBAs “assumed names,” but they’re the same thing. If you want to use a DBA, you’ll need to file an Assumed Name Certificate ($25) with the Texas Secretary of State.
Learn How to Get a Texas DBA Name.
Designate a Registered Agent
Per Texas Business Organizations Code § 5.201, every Texas corporation must appoint a registered agent. You don’t need to hire a registered agent, but if you do, make sure your registered agent will list their address on your certificate wherever possible to ensure maximum privacy.
Learn why the pros use a registered agent service.
What does a registered agent do?
Can I be my own registered agent in Texas?
Yes. But, keep in mind that acting as your own registered agent means listing your personal information on the Certificate of Formation. You’ll also be required to maintain regular business hours so you can accept documents in person.
Hiring a registered agent allows you to keep your personal information off public record and means you won’t be held down by the need to maintain regular business hours.
Can I change my registered agent after starting my corporation?
Yes. You can change your registered agent in Texas by submitting a Statement of Change of Registered Office/Agent with the Texas Secretary of State. It costs $15 to file.
Submit Certificate of Formation
Once you know who your registered agent will be and what you want to name your corporation, you’re ready to file your Texas Certificate of Formation. You’ll need to include the following information:
- Entity name and type. Your name must include “Corporation,” “Company,” “Incorporated,” “Limited,” or an abbreviation for one of these words. Tip: Most corporations keep it short and sweet with “Corp” or “Inc.”
- Registered agent and office. For your Texas registered agent, you can list an individual state resident (like someone in your Texas corporation) or a business that provides registered agent service (like Northwest). Tip: We recommend Northwest. The registered office is the Texas street address where your registered agent will be available during business hours to accept legal notifications for your corporation. Tip: When you hire Northwest, our address will go here.
- Directors. You’ll need to list the name and address of at least one director. The address can be a business address instead of a personal address. Tip: Hire Northwest as your registered agent and you can use our address here.
- Authorized shares. List the number of shares you’re creating and the par value for each, if any. Par value (also known as face value) is the price listed on stock certificates and is typically the lowest price at which a share is traded. If you have multiple classes or series of shares, you’ll need to attach a statement explaining the number, par value, right, and limitations for each share type.
- Purpose and supplemental provisions. This form creates a corporation with the general purpose of conducting lawful business. If you are looking to create a nonprofit or professional corporation, you will need to file a different form. Article 5 also gives you an opportunity to add to an article on the form or to provide additional articles to contain optional provisions. (For example, if you want your corporation to only last for a limited duration, you have the opportunity to include a “self destruct” button in this section—otherwise your corporation will exist perpetually.) Tip: This supplemental provisions section is optional.
- Texas organizer. Your organizer signs your Certificate of Formation. You need at least one organizer, but it doesn’t have to be anyone in your corporation—just a person or business you authorize to submit your certificate. Tip: We’ll be your organizer when you hire Northwest to form your Texas corporation.
- Effective date. When do you want your business to start? You can choose to have it begin upon filing, or you can choose a specific date or event to begin (as long as it’s within 90 days of filing). Most corporations begin upon filing.
Note: All of the information included on this form will become public record.
How can I keep my personal information off public record?
Unfortunately, your Certificate of Formation is a public record and will be stored in an online database. As a result, marketers will find your personal information and sell it to data brokers—bombarding you with junk mail and unwanted phone calls. It’s what they do.
The best way to protect your information is to hire a registered agent who will allow you to list their business address instead of yours—like us.
How do I submit the Texas Certificate of Formation?
You can file your Texas certificate online, by mail, fax, or in person.
Mailed filings must be submitted in duplicate to the following address:
P.O. Box 13697
Austin, TX 78711-3697
Documents delivered in person or sent by courier or Federal Express should be sent to:
James Earl Rudder Office Building
Austin, TX 78701
Faxed filings can be sent to:
Start Your Texas Corporation Today!Get Started
Get an EIN
Your federal employer identification number (commonly known as an EIN or FEIN) is similar to a social security number for your business. The IRS assigns these numbers and uses them to easily identify individual corporations on tax filings, including federal corporate income tax returns.
Do I need an EIN for my Hawaii Corporation?
Yes. Even though corporations are technically only required to have an EIN if they hire employees or have corporate tax status, nearly all corporations need an EIN to open a business bank account. It is also more secure to give out your EIN to business associates rather than your social security number.
How do I get an EIN for my corporation?
You can get an EIN directly from the IRS. The application is free, and most businesses can apply online. However, if you don’t have a social security number, you’ll need to submit a paper application form. Can’t bear to fill out yet another application? Hire Northwest to get your EIN for you. Just add EIN service during checkout when you sign up for our incorporation service.
Write Corporate Bylaws
Bylaws are the internal rules you set for your business. They put into writing how decisions will be made and who gets to make those decisions. All the major organizational processes and procedures for your corporation will go in your bylaws.
For more on Texas Corporate Bylaws (including a free Texas Corporate Bylaws template), see our Texas Corporate Bylaws resource.
Do I need bylaws for my Texas corporation?
Yes. TX Bus Orgs § 21.057 (2019) notes that bylaws shall be adopted by the corporation’s board of directors.
You don’t have to submit bylaws to the state though. Corporate bylaws are internal documents you keep with your other corporate records, such as meeting minutes and resolutions.
What should bylaws include?
Corporate bylaws cover basic policies and procedures for issues such as company finances and management. Bylaws should cover a range of topics, answering key questions like those below:
Meetings: When and where will meetings for shareholders and directors be held? How many attendees are required to transact business? What are the procedures for voting or proxy voting? How do you call a special meeting? What actions can be taken without a meeting?
Stock: How are stock certificates issued and transferred? How is voting affected by issues such as corporate stock owners or fractional shares?
Directors and officers: How many directors must there be? Which officer positions are required? What powers do they have? How do you fill a vacancy or remove a director or officer?
Finances: What are the procedures for retaining profits, issuing dividends, and paying bills? Who can withdraw money from the corporate bank account or sign checks?
Records: Where is the corporate book to be kept? What information will be maintained? How are requests for review or access honored? Can records or copies be kept or distributed digitally?
Amendments and emergencies: Who can amend bylaws and how? Can emergency bylaws be adopted in the case of disaster?
Texas bylaws can make other provisions as well, assuming additions are in accordance with state law. For example, TX Bus Orgs § 21.359 (2019) states that Texas bylaws can require that a director of the corporation can only be elected if the director receives the majority vote of shareholders of a specified portion of shares entitled to vote, the majority vote of the shareholders represented in person or by proxy at a meeting which a quorum is present, or the majority vote of shareholders entitled to vote at a meeting at which a quorum is present.
How do I write bylaws?
Creating bylaws can be overwhelming—where do you start? Northwest can help. We give you free corporate bylaws when you hire us to form your Texas corporation. We know what kinds of topics and questions corporations need to address, and we’ve spent years refining and improving our forms. We offer many other free corporate forms as well, including templates for resolutions and meeting minutes.
Hold an Organizational Meeting
Are there any special rules for Texas organizational meetings?
You’re required to give a minimum of three days notice of the time and place of the meeting to every director or person named in your Certificate of Formation.
Open a Corporate Bank Account
Businesses that mix personal and business finances together risk losing their liability protections, so your corporation will need its own bank account. In addition, a corporate bank account is essential for easily accepting payments, paying bills and holding funds.
How do I open a bank account for my Texas corporation?
To open a corporate bank account in Texas, you’ll need to bring the following with you to the bank:
A copy of the Texas corporation’s Certificate of Formation
The corporation’s bylaws
The corporation’s EIN
If your bylaws don’t specifically assign the power to open a bank account, you may also want to bring a corporate resolution to open a bank account. The resolution would state that the person going to the bank is authorized by the business to open the account in the name of the corporation. At Northwest, we provide free corporate bank resolutions, along with many other free corporate forms, to help you get started fast.
File Reports & Taxes
Texas corporations are required to file an annual Franchise Tax and Public Information Report each year. However, Texas doesn’t have a corporate net income tax or a personal net income tax.
What is the Texas Franchise Tax and Public Information Report?
The Texas Franchise Tax and Public Information Report is a tax for the privilege of doing business in the state of Texas. If you do business in Texas, odds are you have to file. Nearly every entity type—LLCs, LLPs, S corps, regular corporations, and more—is subject to this tax.
Even if you don’t owe any tax, you’ll need to file. The Franchise Tax filing includes a Public Information Report, which is mandatory for corporations. The Public Information Report is essentially an annual report, updating the state on your contact and ownership information.
How much does the Texas Franchise Tax and Public Information Report cost?
There’s no set annual fee to have a Texas corporation, but you will have to file a Public Information Report and Texas Franchise Tax each year and pay any tax owed.
Your tax base is your corporation’s taxable margin (which can be calculated a few different ways: 70% of total revenue, total revenue minus cost of goods sold, total revenue minus compensation or total revenue minus $1 million). Whew.
If calculating your taxable margin wasn’t difficult enough, different businesses pay different rates. The standard rate is 0.75%, but qualifying wholesalers and retailer pay a 0.37% rate. There’s also an “EZ Computation” rate of 0.331% for businesses with less than $20 million in total revenue. Frankly, it’s a complicated tax and most businesses need the help of a CPA or other financial specialist.
When is the Texas Franchise Tax and Public Information Report due?
Your report and tax filing are due by May 15th. File late? Be prepared to pay up. There’s a $50 late fee plus 5-10% of tax owed.
These filings can be easy to forget—which is why we send our clients automatic reminders for your Texas Franchise Tax and Public Information Report filings. Or better yet, let us file for you. With our business renewal service, we send you the completed Public Information Report for you to add your tax information, then submit the report for you for $100 plus the state fee and any tax owed.
What should I know about corporate taxes in Texas?
Texas is one of the few states that doesn’t have a corporate net income tax. There’s no personal net income tax either, so the biggest tax consideration is the Texas Franchise Tax described above.
The state sales tax is 6.25%. Local sales taxes are typically added on as well. For example, the five biggest cities in Texas (Houston, San Antonio, Dallas, Austin, and Fort Worth) all have a total sales tax rate of 8.25%.
Do Texas corporations have to register with the Texas Comptroller’s Office?
More than likely. Most businesses are required to register with the Texas Comptroller’s Office for a Sales Tax Permit. You can register via eSystems or by filing an application for a sales tax permit. You’ll need your EIN before you can register.