Why Incorporate in Texas?
Considered one of the most business-friendly states in the nation, Texas offers several business and tax incentives, provided your corporation meets certain criteria.
For example, the Texas Enterprise Fund (TEF) awards “deal-closing” grants to companies considering a new project in Texas and other out-of-state sites. The company must be well established, financially sound and must operate in an advanced industry that affords it other feasible location options nationally and/or internationally.
For most entrepreneurs looking to start a larger business, creating a Texas corporation may be the best choice. As a corporation, your business is able to buy and trade stock, and when it comes to excess profits, corporations offer more flexibility than a limited liability company (LLC). A corporation is allowed to pass income and losses to its shareholders, who report taxes on an individual tax return at ordinary levels.
Is an LLC Better Than a Corporation?
It all depends on your goals. Limited liability companies are usually better for smaller businesses. An LLC is easier to set up, and you receive many of the same benefits as a corporation, but with less regulation. Learn more about forming a Texas LLC so you can decide which business entity is right for you.
Benefits of Forming a Texas C Corp
The strongest form of liability protection possible by insulating your personal assets and finances from business debts, obligations, damages, bankruptcy, or other liabilities
Several options to create, buy, sell, or transfer stock, including publicly
The ability to issue more than one type of stock
The ability to sell stock to investors inside and outside the U.S.
The ability to raise more funds by issuing more stock
Benefits of Forming a Texas S Corp
It offers several advantages similar to those provided by a C Corp including, but not limited to:
Options for creating, transferring and selling stock, though not as many as a C Corp
The capacity for up to 100 shareholders
Simpler rules than those applicable to C Corporations
Easy transfer of ownership simply by selling your stock
The possibility of saving money by allowing you to pay less self-employment tax
In this guide, you’ll find information on naming your corporation, getting a Registered Agent, the fees you’ll need to pay, business taxes and much more. We also cover what you'll need to register your corporation and how you'll interact with the TX Secretary of State.