How to Start a Corporation in Texas

Filing fee: $300 (Form 201, for-profit corporation)

Processing time: [PROCESSING_TIME] — online filings via SOSDirect are generally faster than mail

State agency: Texas Secretary of State

Annual report due: Texas corporations file a Public Information Report (PIR) with the Texas Comptroller annually, due May 15

State tax rate: No state corporate income tax; franchise tax applies — rate varies by revenue and business type

To start a corporation in Texas, you file a Certificate of Formation (Form 201) with the Texas Secretary of State, pay the $300 state filing fee, and appoint a registered agent with a physical Texas address. Once the state approves your filing, you'll adopt corporate bylaws and hold an organizational meeting to get the business running.

Why form a corporation in Texas

Texas has no state corporate income tax, which is one of the more meaningful structural advantages for a growing business. The state does impose a franchise tax, but many small corporations fall below the threshold or qualify for reduced rates. Texas also has a large, diverse economy and no personal income tax — factors that make it easier to attract employees and investors.

For entrepreneurs raising outside capital or planning to issue stock, a Texas C Corporation is often the right structure. It's the entity type most venture capital firms and angel investors expect, and it gives you the most flexibility for equity compensation and future funding rounds.

Texas corporation types

Texas recognizes several corporation types. The right one depends on your ownership structure, tax goals, and whether you plan to raise outside investment.

• C Corporation: the default corporation structure. Taxed separately from its owners at the federal level. Best for businesses planning to raise venture capital, issue multiple classes of stock, or eventually go public.

• S Corporation: a tax election made with the IRS after formation, not a separate state entity type. Passes income and losses through to shareholders, avoiding double taxation. Restricted to 100 shareholders, all of whom must be U.S. citizens or residents.

• Professional Corporation (PC): for licensed professionals — doctors, lawyers, accountants, engineers — who want the liability protection of a corporation. Texas requires all shareholders to hold the relevant professional license.

• Close Corporation: a simplified structure for small, closely held businesses. Allows shareholders to manage the corporation directly without a formal board of directors.

• Nonprofit Corporation: for organizations formed for charitable, educational, religious, or public benefit purposes. Eligible to apply for federal 501(c)(3) tax-exempt status after state formation.

How to start a corporation in Texas

The formation process has 6 core steps. Most of the work happens before you file — choosing a name, appointing a registered agent, and preparing your Certificate of Formation. The state filing itself is straightforward once those pieces are in place.

• Step 1 — Choose a business name: your corporation's name must be distinguishable from other registered Texas entities. Check name availability through the Texas Secretary of State's SOSDirect database before filing. The name must include a corporate designator like "Corporation," "Incorporated," "Company," or an abbreviation (Corp., Inc., Co.).

• Step 2 — Appoint a registered agent: every Texas corporation must designate a registered agent with a physical street address in Texas. The agent receives legal documents and official state notices on behalf of the corporation during normal business hours. You can appoint an individual Texas resident or a registered agent service.

• Step 3 — Prepare and file Form 201: the Certificate of Formation (Form 201) is the document that legally creates your Texas corporation. It requires the corporation's name, registered agent information, number of authorized shares, and the incorporator's signature. File online via SOSDirect, by mail, by fax, or in person with the Texas Secretary of State. The state filing fee is $300.

• Step 4 — Adopt corporate bylaws: bylaws are the internal rules that govern how your corporation operates. They cover director elections, officer roles, meeting procedures, and voting rights. Bylaws are not filed with the state, but Texas law requires corporations to adopt them after formation.

• Step 5 — Hold an organizational meeting: after filing, the initial directors or incorporators hold an organizational meeting to formally adopt the bylaws, elect officers, authorize the issuance of stock, and handle any other initial business decisions.

• Step 6 — Get an EIN and open a business bank account: apply for an Employer Identification Number (EIN) from the IRS at irs.gov. You'll need the EIN to open a business bank account, hire employees, and file federal taxes.

Registered agent requirements

Every Texas corporation must maintain a registered agent at all times. The agent must have a physical street address in Texas — a P.O. box doesn't qualify — and must be available during normal business hours to receive service of process.

The registered agent can be an individual Texas resident, a domestic entity, or a foreign entity authorized to do business in Texas. Many corporations appoint a registered agent service rather than listing a person — it keeps a personal address off public records and ensures someone is always available to receive documents.

Corporate bylaws and governance

Corporate bylaws are internal governance documents — they're not filed with the Texas Secretary of State, but they're required under Texas law. The Texas Business Organizations Code requires corporations to adopt bylaws that address directors, officers, and meeting procedures.

At minimum, your bylaws should cover the number and qualifications of directors, how directors are elected and removed, officer roles and responsibilities (president, secretary, treasurer), how shareholder and board meetings are called and conducted, and how the bylaws themselves can be amended. Getting these details right at the start saves real headaches later — especially if you bring on investors or co-founders.

Texas corporation taxes and ongoing requirements

Texas has no state corporate income tax, but corporations are subject to the Texas franchise tax — a tax on the privilege of doing business in the state. The franchise tax is calculated based on revenue, not profit, and the rate depends on your business type. Many small corporations qualify for the no-tax-due threshold, which changes periodically, so check the Texas Comptroller's website for the current figure.

Texas corporations also file a Public Information Report (PIR) with the Texas Comptroller each year, due May 15. The PIR is filed alongside the franchise tax report and lists the corporation's officers, directors, and registered agent. Missing the deadline can put your corporation out of good standing with the state.