Texas 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 on EIN service during checkout when you sign up for our incorporation service.

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.

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.

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.

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.

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%.

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.

The state charges a $300 filing fee to submit a Certificate of Formation. If you pay with a credit card, there’s also a 2.7% convenience fee.

Hire us for a one-time fee of $535, including the state filing fees, a year of registered agent service and more.

For the fastest processing time (2 business days), file online or in person. If you file by mail, it could take 5-7 business days to receive your stamped copy back in the mail.

There’s no general, statewide business license required in Texas, but the licenses and permits you need will depend on what you do and where you’re doing business.

Most Texas businesses need a Texas Sales Tax Permit, which is required to sell tangible goods or services in the state. Different cities and counties have their own specific licensing requirements as well. El Paso, for example, issues a variety of licenses for businesses such as laundries, flea markets, spas, and tattoo studios.

For some license applications you may need an EIN or a certified copy of your Certificate of Formation. At Northwest, we can streamline the process and get these for you—simply add on these items during checkout.

A corporation formed outside of Texas—but which conducts business in the state—is considered a foreign Texas corporation. For example, if you incorporated in Arkansas but decide to open a storefront in Texas, you would be a foreign Texas corporation. This also means you would need to register with the state by filing an Application for Registration with the Texas Secretary of State. Foreign corporations are required to file the Texas Annual Report and a state franchise tax as well.

Absolutely! We’re happy to start a nonprofit corporation for you. Note that incorporating a Texas nonprofit requires a different form. The filing fee is lower as well. Texas nonprofits still pay federal and state taxes (unless they apply and are granted tax exempt status by the IRS and the Texas Comptroller’s Office). Depending on your nonprofit’s tax exempt status, you will either have to submit an annual public information report or a periodic report to the Texas Secretary of State.

Business owners can require mail forwarding for a lot of reasons: You may be operating your business from home and prefer to keep your personal information private. You may not want personal documents, like bank statements, delivered to an office where anyone can read them. You may travel a lot. Whatever your reason, Northwest includes limited mail forwarding with our registered agent and formation services. Are your mail forwarding needs a little more robust? We also offer unlimited mail forwarding with a unique suite number as part of our premium Texas Mail Forwarding Service. While you can use our address, we unfortunately do not have the capabilities to act as your return address for online or Amazon sellers.

It’s a conundrum: you need a local number to display on your website and give to customers, but you don’t want to make your personal number quite so…public. We get it. And we’ve got you covered with Northwest Phone Service. We can provide you with a virtual phone number in any state—plus unlimited call forwarding and tons of easy-to-use features. You can try Phone Service free for 60 days when you hire us to form your corporation, and maintaining service is just $9 monthly after that. No contract required.