How to Become Incorporated in Texas
If you're wondering how to become incorporated in Texas, there are steps you'll need to follow to receive corporation status in the state of Texas.3 min read
If you're wondering how to become incorporated in Texas, there are a number of steps you'll need to follow in order for your company to receive corporation status in the state of Texas. These include deciding on a business structure, coming up with a name, choosing who will manage the business, filing a certificate of formation, and requesting an EIN.
Types of Corporations
When becoming incorporated in Texas, there are three possible options. You can become incorporated as:
- A for-profit corporation.
- A nonprofit corporation.
- A foreign corporation.
Necessary Steps for Incorporating in Texas
The first step for becoming incorporated in the state of Texas is choosing the business structure that best fits your needs and goals. It is a complicated task, so the following steps should be taken when making a decision:
- Discuss the matter with an attorney. Due to this being a complex matter, talking to a lawyer will help clear things up regarding your corporation's expectations and the way you want to run it. The best way to find a qualified attorney is through recommendations. However, if that is not an option, searching through the state's bar association database should help you find the right person for the job.
- Make a decision regarding the way you want your corporation to function. Before starting the incorporation process, you should decide on things like how involved the shareholders should be in company decisions or if the future corporation will be for-profit or non-profit, among other important questions that need to be considered.
- Decide where you want to incorporate your business. A company doesn't need to be incorporated in Texas to do business within the state. You can incorporate in any state, and the laws of that state will govern your future corporation. If, however, you don't register in Texas but would like to do business in Texas, you must register as a foreign corporation.
- Determine how the corporation will handle the profits. A for-profit corporation distributes the profits to shareholders or employees as dividends or bonuses, while a nonprofit corporation uses them for reinvestments or charity work.
Creating a For-Profit Corporation
The first step in creating a for-profit corporation is naming it, as the law in Texas asks any corporation to have a business name. The name should then be registered with the Patent and Trademark Office, so it is protected against being used by others. The name must include one of these words
The name also must not be too similar to other businesses registered within the state of Texas.
Next, you will have to name the people in charge of managing the corporation, as the state requires all companies to have one or more directors. Also required is the appointment of a registered agent, which can either be an individual or an entity that is responsible for handling all official notices addressed to the corporation.