How to Incorporate in Texas

How to Incorporate in Texas

The vast state of Texas, with its thriving economy and business-friendly environment, attracts many entrepreneurs. If you’re thinking of giving your venture a robust legal structure, you might be considering how to incorporate in Texas. Incorporation not only lends credibility to your business but also offers numerous benefits, which we’ll dive into in this guide.

Key Steps to Incorporate in Texas

  1. Choose a Business Name: Ensure this name is unique and includes ‘Incorporated’, ‘Corporation’, ‘Limited’, or their abbreviations. Check the Texas Secretary of State’s database to make sure your desired name is available.
  2. Appoint a Registered Agent: This person will serve as the primary contact for legal documents and must have a physical address in Texas.
  3. File the Certificate of Formation: You can do this online, mail it, or submit it in person at the Texas Secretary of State’s office.
  4. Obtain an Employer Identification Number (EIN): The IRS provides this, and you’ll need it for tax purposes.
  5. Stay Compliant: Always be aware of and keep up with any annual franchise tax reports or other regulatory requirements in Texas.

Choosing Your Business Structure: LLC, Partnership, or Sole Proprietor

LLC (Limited Liability Company):

  • Offers protection to owners from personal liability.
  • Flexibility in management and profit distribution.


  • More paperwork than a sole proprietorship.
  • Can be more expensive to start.



  • Easy and inexpensive to start.
  • Combined skills, knowledge, and resources.


  • Joint liability for business debts.
  • Potential for disagreements between partners.

Sole Proprietorship:


  • Full control of the business.
  • Simplest and least expensive form to establish.


  • Personal liability for business debts.
  • Difficult to raise capital.

Pros vs. Cons of Incorporating in Texas


  • Asset Protection: Incorporating shields your personal assets from business liabilities.
  • Tax Advantages: Corporations might benefit from several tax deductions.
  • Credibility: Incorporation adds a level of legitimacy, which can aid when seeking business partnerships or investors.


  • Cost: There are initial costs to incorporate, and other ongoing fees can add up.
  • Paperwork: Corporations require diligent record-keeping and consistent reports.
  • Double Taxation: Corporate income might get taxed twice: when earned and again when dividends go to shareholders.

Key Insights: Costs, Documents, and Timeline

  • Typical Cost of Incorporation: In Texas, the filing fee for the Certificate of Formation stands at $300. However, don’t forget about other potential expenses, such as hiring a registered agent, which can range from $50 to $200 annually. Legal and professional fees can also affect the total cost.
  • Documents Needed: You’ll require the Certificate of Formation and bylaws for your corporation. Although you don’t submit bylaws to the state, they remain essential for internal use. Also, ensure that any agreements between shareholders or passed resolutions are well-documented and stored.
  • Timeline to Incorporation: After submitting the Certificate of Formation, the Texas Secretary of State usually processes it within 3-5 business days. However, online submissions might be faster, often getting processed within 24-48 hours.

Best Practices Post-Incorporation

Once you’ve successfully incorporated in Texas, maintaining compliance becomes crucial. This means you should hold regular board meetings, keep accurate records, and adhere to all state-specific regulatory requirements. Make sure all business activities align with your corporation’s stated objectives in its bylaws to prevent potential legal disputes.


Learning how to incorporate in Texas marks the first step towards securing your business’s future in the Lone Star state. While the process might seem daunting, following these steps, weighing the pros against the cons, and preparing with the required documents and fees can simplify the journey. Remember, incorporation isn’t just about legally establishing a business; it represents a commitment to professionalism, growth, and achieving long-term success in Texas’s dynamic economy.