Start a Texas Corporation
As a business-friendly state with no state income tax, Texas is a great place to form your corporation. To incorporate in Texas, you’ll need to file the Certificate of Formation with the TX Secretary of State. We’ve created a step-by-step guide to help you start and maintain your Texas corporation.
Or, leave the paperwork to us and hire Texas Virtual Office to form your corporation! We offer reliable registered agent service for just $25 a year, along with mail scanning and virtual office options, DBA and trademark filing, and much more.
Texas Incorporation Service
$435 Total*
- Fast Certificate of Formation filing
- Year of Registered Agent Service (then $25/yr)
- Free use of our business address to increase your privacy
- Renewal Service Enrollment for PIR & Franchise Tax Report
- Secure online account, accessible from anywhere
- Legal document scans & instant email notifications
- Free library of business documents & resources
- Free attorney-drafted bylaws template
- Lifetime customer service from local Texas filing experts
- Easy to add additional services, like DBA & Virtual Office
*Includes state fee
How to Incorporate in Texas
Corporations are complex business entities that are more challenging to start and maintain than Texas LLCs, but they have some big advantages. For one thing, corporations are prestigious and appealing to investors. Since Texas has no corporate or individual income tax, it’s one of the best states in the country to form a corporation.
Here are the steps you’ll need to take to incorporate in Texas:
1. Choose a business name
When choosing a name for your corporation, you’ll need to make sure your name meets Texas’ name requirements.
Your corporation name must:
- Contain an entity identifier such as “corporation,” “company,” “corp,” “inc,” or “co.”
- Be unique among all the business entity names the TX SOS has on record
It’s important to do a business name search to make sure your desired name isn’t the same as, or very similar to, the name of another business entity that’s already registered in Texas.
You can use the Franchise Tax Account Search to figure out if the name you want is available. Or, call or email the Texas Secretary of State and ask for a preliminary name check.
If you want to make sure your name is available when you’re ready to file your Certificate of Formation, you can reserve that name for 120 days by filing an Application for Reservation of Entity Name ($40) with the Secretary of State.
You can file this form by mail, fax, in person, or online through SOSDirect.
Texas allows DBA “doing business as” names, which are also called assumed business names or trade names. Getting a DBA lets you do business under a name other than your official business name. This can be helpful if you want to create multiple brands using the same business entity, or if you decide to take your business in a new direction but don’t want to go through the rigmarole of starting a new company.
You can get an Assumed Business Name by filing an Assumed Name Certificate with the TX SOS by mail, fax, in person, or online. There’s a $25 filing fee. Keep in mind that DBAs aren’t exclusive in Texas, so it’s possible that another business may use the same name.
2. Appoint your board of directors
You’re required to appoint at least one director when you form your corporation. The initial director(s) are usually chosen by the incorporators, and they may include the incorporators themselves, along with shareholders.
Your board of directors will need to issue authorized shares of stock to all shareholders before you file your Certificate of Formation.
Once your corporation is established, your directors should be annually elected by your shareholders.
3. Choose a Registered Agent
Corporations are required by Texas state law to designate a registered agent (TX Bus Orgs § 5.201 (2024)). You’ll need to appoint your registered agent before you can file the Certificate of Formation.
Your Texas registered agent must:
- Accept state and legal notices on your behalf and forward them to you promptly.
- Have a physical street address in Texas, which will go on the public record.
- Be available at this address during normal business hours to accept service of process in person.
Why hire a registered agent service?
Privacy
A registered agent’s address is required to be public, so that anyone can contact your office to deliver a legal summons or service of process. However, if you work from home (or don’t want to risk being served with a lawsuit at your place of business), using your own address can be a big privacy risk.
If you prefer to keep your personal address out of public databases, you can hire a registered agent service that will let you use their address instead. When you hire Texas Virtual Office as your registered agent, you’ll be able to use our address in all address fields, keeping your information private.
Professionalism
If your business is ever served with a lawsuit, it’s much better to receive this notice privately, rather than in front of your customers or neighbors. Getting served at your home or your place of work can be embarrassing and even ruin your professional reputation.
A good registered agent service will forward your state and legal notices to a secure online account, where you can review them in private.
Convenience
A registered agent is required to be at their registered office address year-round during normal business hours. This is extremely inconvenient for business owners who work irregular hours or simply want to take a vacation now and then.
With a registered agent service, you can rest assured that someone will be there to accept any state or legal notices you receive, and you’ll be able to review them digitally, wherever you are.
You can appoint yourself as the registered agent for your company if you like, as long as you live in Texas. However, you’ll need to put your address on the public record, and you’ll be expected to be present at this address during normal business hours, in case you need to accept a legal summons in person.
Since this isn’t convenient for most people running a corporation, business owners typically hire a registered agent service to do this job.
4. File Your Certificate of Formation
Filing a Certificate of Formation with the Secretary of State officially forms your corporation in Texas.
Here are the details you’ll need to include on the Certificate of Formation:
- Corporation name
- Registered agent and registered office address (must be a street address in Texas)
- Name(s) and address(es) of initial director(s)
- Number of shares the corporation may issue
- Par value of shares (if applicable)
- Initial mailing address (can be a P.O. box or a street address)
- The name and address of your organizer (the person filing your Certificate of Formation)
- Any optional provisions you’d like to add
- Whether your Certificate of Formation will take effect when the document is filed or at a later date (most businesses choose “when the document is filed”)
Keep in mind that the names and addresses you include on the Certificate of Formation will go on the public record.
Your Certificate can be filed by mail, in person, or online. If submitting by mail or in person, you should submit the form in duplicate.
By mail:
Secretary of State
P.O. Box 13697
Austin, TX 78711
In person:
James Earl Rudder Office Building
1019 Brazos
Austin, Texas 78701
Online:
SOSDirect
Once the state has approved your Certificate, they’ll mail you a file-stamped copy of the document. If you file online, you’ll be emailed a confirmation.
The state filing fee for the Certificate of Formation is $300 (plus a 2.7% credit card fee).
5. Draft corporate bylaws
Texas corporations are required to adopt corporate bylaws. Your bylaws are a legally binding internal document, covering important processes like meetings, amendments, and mergers/dissolution, among other issues. For that reason, it’s important that your shareholders, directors, and officers understand and agree to your bylaws before they’re finalized.
You can add any provisions to your bylaws that don’t contradict your Certificate of Formation or violate TX state law. However, bylaws typically include:
- Each shareholder’s name, address, initial contributions, and number of shares
- The names and addresses of your initial director(s) and officer(s).
- Titles and responsibilities of officers and directors
- Meeting schedule and voting protocols
- How many classes of stock your corporation is issuing and the rights of each class
- Company assets and bookkeeping procedures
- Amendments to update or change your Certificate of Formation or bylaws
- How you’ll handle a merger or dissolution, if necessary
NOTE: It’s highly recommended that you consult a business lawyer when creating your bylaws.
According to BOC § 21.057, corporate bylaws must be adopted by your board of directors. Bylaws are typically adopted at the initial directors’ meeting.
Get a Free Bylaws Template When You Incorporate with Us
Next Steps
After the Secretary of State approves your Certificate of Formation, you have a corporation. However, there are some important steps to take before you can start doing business.
1. Obtain an Employer Identification Number (EIN) from the IRS
Corporations are required to get an EIN, also called a FEIN (Federal Employer Identification Number), from the IRS. This is a 9-digit number you’ll need to include on your tax forms and to open a corporate bank account.
Obtaining an EIN is free through the IRS. You can apply for an EIN online through the IRS website. However, international applicants need to apply by mail, fax, or phone.
2. Open a corporate bank account
Every corporation needs its own bank account. Mixing corporate and personal assets is called “piercing the corporate veil,” and doing so could lead to your company losing its limited liability status.
When opening your business bank account, you’ll most likely need:
- Photo ID
- EIN
- Certificate of Formation
- Business license(s)
- Corporate bylaws
- Corporate resolution to open a bank account
Call the bank ahead of time to find out the exact documents you need.
3. Acquire any required business licenses and permits
Texas doesn’t have a general business license, but you’ll most likely need one or more licenses to operate legally. Common licenses and permits include:
- Building or zoning permit
- Home occupation permit
- Professional license for specific industry
- City or county business license
You can learn more about licenses for specific professions on the TX Department of Licensing and Regulation website. Or, check out the Texas Business Licenses and Permits Guide (2024-2025).
4. Purchase business insurance
Depending on your industry and the level of risk associated with it, you may or may not need business insurance. Here are some common types of business insurance:
- General liability insurance (required for some industries)
- Business owner’s policy (combined general liability and property insurance)
- Commercial auto insurance (required if using a vehicle for company purposes)
- Specialized liability insurance (such as medical malpractice insurance)
Texas only requires workers’ compensation insurance for businesses that contract with government agencies. However, even if it’s not required, workers’ comp insurance can help cover missing wages or medical expenses for employees who are injured on the job.
Maintaining Your Corporation
Corporations are complex business entities that require regular maintenance. Here are two requirements to be aware of.
1. File the Public Information Report
Once you’ve formed your corporation, you must file a Public Information Report each year to keep your principal office address and registered agent information up to date with the TX Secretary of State. If your corporation makes over $2.65 million in annual revenue, you’ll also need to file a Franchise Tax Report. The due date for both the Public Information Report and the Franchise Tax Report is May 15.
What happens if I don’t file the Public Information Report?
Missing your filing will result in your corporation being marked Inactive, which means that your corporation is no longer in good standing with the state. This can prevent you from being able to register to conduct business in another state and may be a barrier to securing funding from financial institutions.
In order to restore your good standing, you’ll need to file any past due reports and a Tax Clearance Letter for Reinstatement.
Keep Your Business in Good Standing
Without Lifting a Finger
To keep your corporation from becoming inactive and needing to be reinstated, we include enrollment in our Renewal Service with Incorporation Service.
We’ll send you an email notification before your report due date to let you know that we’ll be filing on your corporation’s behalf. Then, we’ll file your report, well before the deadline so you don’t miss it ($100 + state fee, charged at the time of filing). If you prefer to handle your own annual reports, you can easily cancel Renewal Service in your online account.
2. File Tax Returns
Filing taxes as a corporation can be complicated, so we recommend hiring a CPA or tax lawyer to assist. However, we’ll provide an overview of federal, state, and local taxes for Texas corporations. These tax requirements apply to domestic Texas corporations as well as foreign corporations that do business in Texas.
Federal taxes
Corporations must pay federal corporate income tax, which is currently 21%. Unless you change your tax election (for example, to an S-corp), you’ll file as a C-corp using IRS Form 1120.
Some corporations elect to be taxed as an S-corp (small business corporation). S-corporations are taxed as pass-through entities, so they do not need to pay corporate income tax. To be taxed as an S-corp, your corporation must:
- Be domestic to the United States
- Have no more than 100 shareholders
- Not have partnerships, corporations, or non-US citizens as shareholders
- Have only one class of stock
To elect S-corp status, you’ll file Form 2553 with the IRS.
NOTE: It’s wise to consult a tax accountant to see if electing S-corp status will benefit your business.
State taxes
Luckily for business owners, Texas doesn’t have an individual or corporate income tax. Texas does have a Franchise Tax, but only businesses making over $2.65 million a year need to pay it.
However, Texas does have a state sales tax (6.25%). Some cities and counties also have a local sales tax, which can be up to 2%. To collect sales tax from customers, you’ll need a Sales Tax Permit.
Local taxes
Consult your city and county government to see what local taxes are required for your industry.
Benefits of Forming a Corporation
Here are some reasons you might want to form a corporation.
Liability Protection
Like LLCs, corporations provide liability protection for their owners. If a corporation gets sued or defaults on a debt, the owners’ personal assets are usually protected from seizure.
Attracts Investors
Corporations can issue stock, which often makes them attractive to investors. They can also issue stock benefits to employees and transfer ownership more easily than LLCs.
Tax Advantages
For some businesses, forming a corporation can help you save on taxes. Corps are eligible for tax breaks that LLCs aren’t. A CPA can tell you if a corporation is a smart choice for your taxes.
Texas Incorporation FAQ
The state fee for filing the Texas Certificate of Formation is $300. However, there will likely be other start-up expenses, such as business license fees, business insurance, and legal fees.
All corporations in Texas are required to appoint and maintain a registered agent.
The Public Information Report (PIR) is an annual filing that all registered TX corporations and LLCs are required to file with the Texas Comptroller every year. The deadline is May 15th each year.
On the Public Information Report, you can update your business address and your registered agent name and address, if needed. There is no fee for this report.
Quick. Easy. Affordable.
Texas Incorporation Service for $435 Total*
*Includes state fees