Incorporating in Texas requires filing a Certificate of Formation with the Texas Secretary of State and paying a $300 filing fee. The process is straightforward, but you need to make several decisions beforehand: your corporate name, share structure, registered agent, and director appointments. Here’s how to work through each step.
Choose a Corporate Name
Your corporation’s name must include one of these words (or an abbreviation): “Corporation,” “Company,” “Incorporated,” or “Limited.” So “Bright Sky Inc.” or “Redline Corp.” would both qualify. Professional corporations can use “Professional Corporation” or “P.C.” instead.
The name also has to be distinguishable from every other entity already on file with the Secretary of State. That includes active Texas entities, foreign entities registered to do business in the state, reserved names, and registered names. You can’t simply swap a suffix or add a minor variation and call it different. If another business already holds a similar name, that business can provide a notarized written consent allowing you to use yours, but without that consent the filing will be rejected.
A few additional restrictions apply. Your name can’t imply the corporation is engaged in a business it isn’t authorized to pursue, can’t falsely suggest an affiliation with a government entity, and can’t contain the word “lotto” or “lottery.” Before you commit, call the Secretary of State’s office at (512) 463-5555 or email the Corporations Section to get a preliminary name availability check. Keep in mind this is only a preliminary clearance, not a guarantee. The final determination happens when your filing is actually processed.
Appoint a Registered Agent
Every Texas corporation must have a registered agent, which is the person or entity designated to receive legal documents and official notices on the corporation’s behalf. Your registered agent can be either an individual who is a resident of Texas or a business entity (domestic or foreign) that is registered to do business in the state. The corporation itself cannot serve as its own registered agent.
The registered agent must maintain a registered office at a physical street address in Texas where someone can be personally served during normal business hours. A P.O. box or a telephone answering service won’t satisfy this requirement. Many incorporators use a commercial registered agent service for convenience, though you can name yourself or another individual if they meet the residency requirement. Whoever you designate must consent to serving in that role, either in writing or electronically, before you file.
Decide on Your Share Structure
Your Certificate of Formation must state the total number of shares the corporation is authorized to issue. You’ll also choose whether your shares have a stated par value (a minimum price per share, like $0.01 or $1.00) or no par value at all. Many small corporations authorize a round number of shares, commonly 1,000 or 10,000, with no par value, which keeps things simple. You’re not required to issue all authorized shares right away. The authorized amount just sets the ceiling for how many shares the corporation can eventually distribute.
Name at Least One Director
Texas requires a minimum of one director, who must be a natural person (not another business entity). There are no residency requirements, so your director can live anywhere. If you’re forming a single-owner corporation, you can serve as the sole director yourself. List each director’s full name on the formation document.
File the Certificate of Formation
The official document is Form 201, the Certificate of Formation for a For-Profit Corporation, available on the Secretary of State’s website. You can file online through the SOSDirect portal or submit the form by mail. The filing covers these key items:
- Entity name with the required corporate designator
- Registered agent name and registered office address
- Director names (at least one)
- Authorized shares with or without par value
- Organizer information for the person submitting the filing
- Initial mailing address where the Comptroller of Public Accounts will send tax correspondence (this can be a P.O. box)
Unless you specify otherwise, your corporation will exist perpetually. You can include an optional termination date, but most incorporators leave the duration open-ended.
The standard filing fee is $300. If you need faster turnaround, Texas offers three levels of expedited processing: standard expedite for an additional $50, next-day processing for $500, and same-day processing for $750. These fees are on top of the base $300.
After Filing: Organizational Steps
Once the Secretary of State processes your Certificate of Formation and returns a filed copy, your corporation legally exists. But there are several things you should do right away to get it fully operational.
Hold an organizational meeting (or adopt written consents in lieu of a meeting) where the initial directors appoint officers, adopt bylaws, authorize the issuance of shares, and handle any other startup business like opening a bank account or selecting a fiscal year. Your bylaws are an internal document that governs how the corporation operates, covering topics like meeting procedures, officer roles, and voting requirements. Texas doesn’t require you to file bylaws with the state, but you need them in your corporate records.
Apply for an Employer Identification Number (EIN) from the IRS. You’ll need this to open a business bank account, hire employees, and file federal tax returns. The application is free and can be completed online in minutes at irs.gov.
Texas Franchise Tax and Annual Filings
Texas doesn’t have a corporate income tax, but it does have a franchise tax that applies to most entities doing business in the state. The no tax due threshold for the 2026 report year is $2.47 million in annualized total revenue. If your corporation’s revenue falls at or below that threshold, you won’t owe any franchise tax and you’re not required to file a No Tax Due Report.
However, you are still required to file a Public Information Report (PIR) each year with the Comptroller, regardless of whether you owe tax. The PIR lists basic information about your corporation’s officers, directors, and registered agent. Corporations with revenue above the no tax due threshold must also file either the E-Z Computation form (available to entities with annualized total revenue of $20 million or less) or the Long Form franchise tax report.
If you’re a new veteran-owned business that has pre-qualified with the Comptroller, you’re exempt from both the franchise tax report and the PIR for your first five years, as long as you continue to meet the qualification criteria.
Franchise tax reports are due annually. If you need more time, you can request an extension by submitting a valid request on or before the original due date. Missing the deadline or failing to file entirely can result in penalties, and the state can eventually forfeit your corporation’s right to do business in Texas.
What Incorporation Costs in Total
The minimum out-of-pocket cost is the $300 filing fee paid to the Secretary of State. Beyond that, your costs depend on your choices. A commercial registered agent service typically runs $50 to $300 per year. If you hire an attorney or an online formation service to prepare and file your documents, expect to pay anywhere from $100 to several hundred dollars on top of the state fee. The EIN application is free. And unless your revenue exceeds the no tax due threshold, your annual franchise tax obligation will be zero, though you’ll still spend time filing the PIR each year.