Key Takeaways
- $300 Certificate of Formation filing fee (Form 201) paid to the Texas Secretary of State, Corporations Section
- Minimum 1 director required (Tex. Bus. Orgs. Code § 21.403)
- Public Information Report (Form 05-102) due within by May 15 of the year after the corporation is formed, $0 (no separate filing fee) fee; $50 report penalty plus tax penalties and interest if franchise tax is owed late penalty
- No corporate or personal income tax; franchise (margin) tax is $0 below the ~$2.65M no-tax-due threshold, then 0.75% of taxable margin (0.375% for wholesale/retail) — Public Information Report still due May 15
- Registered Agent with a physical Texas street address required
- No publication requirement
- S-Corp election available via IRS Form 2553 within 75 days of formation; the federal election does not exempt the entity from Texas franchise tax
- Same-day filing available through LLC Attorney at no markup on state fees
Forming a corporation in Texas means filing a Certificate of Formation (Form 201) with the Texas Secretary of State, paying a $300 filing fee, naming at least one director, and keeping up with the Comptroller's franchise tax and Public Information Report each May 15. Texas charges no corporate or personal income tax, which makes it a leading lower-cost alternative to Delaware for companies that actually operate here. This guide walks through every step and cost of forming a Texas C-Corporation, with same-day filing available through LLC Attorney starting at $49.
C-Corp vs LLC in Texas
Most first-time business owners in Texas choose an LLC. A Texas corporation earns its keep in specific situations — chiefly when you plan to raise venture capital, grant employee stock options, or eventually pursue an acquisition, where the C-Corp share structure is expected rather than optional.
Choose a Texas corporation when:
- You plan to raise venture capital or institutional investment. VC firms, angels, and most institutional investors require a C-Corp structure before they write a check. Preferred stock, convertible notes, SAFEs, and board governance by class are native to corporations, not LLCs.
- You want to issue stock options to employees (ISOs). Corporations issue stock; LLCs issue membership interests. ISO and NSO option plans are available to corporations but not to LLCs.
- You expect to eventually go public or sell to a public company. Public markets operate on corporate stock mechanics.
- You are in a regulated industry where corporate structure is required or expected by licensing boards, government contracts, or institutional counterparties.
Stick with an LLC when:
- You are a small business with one or a few owners who will not need institutional investment.
- Pass-through taxation without payroll complexity is the priority.
- You do not need stock option plans or institutional investment mechanics.
Why and when to incorporate in Delaware vs your home state
Delaware is the default for startups on a venture track. Institutional investors expect it, term sheets assume it, and the Court of Chancery resolves corporate disputes faster than any general trial court. If you are raising a priced round or structuring for QSBS eligibility, incorporate in Delaware.
If you are not raising outside capital, Texas is usually the better choice. A Delaware corporation operating in Texas still has to register as a foreign corporation there, pay Texas fees, and file a Delaware franchise tax return each March 1. That is duplicate overhead with no benefit for a business that will not seek institutional investment.
What's Unique About Corporations in Texas?
Texas pairs a large, fast-growing economy with no corporate or personal income tax, which is why a growing number of founders incorporate here rather than defaulting to Delaware. The trade-off is the franchise (margin) tax: it reaches even thin-margin businesses once revenue clears the no-tax-due threshold, and the Public Information Report is owed to the Comptroller every May 15 regardless of tax. Texas does not host a separate equity court like Delaware's Chancery, but its Business Court, launched in 2024, now hears high-value commercial disputes with specialized judges.
Key Texas-specific requirements:
- Certificate of Formation (not "Articles of Organization" — that is the LLC filing document)
- Minimum of 1 director (Tex. Bus. Orgs. Code § 21.403); no Texas residency or citizenship requirement
- No corporate or personal income tax; franchise (margin) tax is $0 below the ~$2.65M no-tax-due threshold, then 0.75% of taxable margin (0.375% for wholesale/retail) — Public Information Report still due May 15
- Public Information Report due May 15 to the Comptroller, not the Secretary of State — easily missed because the two agencies operate separately
- Texas Business Court (operational since September 2024) — specialized judges for large commercial and corporate-governance disputes, an alternative to general district courts
Selecting a Name for Your Texas Corporation
Your corporation's name must comply with Texas naming requirements:
- Must include "Corporation," "Incorporated," "Inc.," "Corp.," or another Texas-approved designator (Tex. Bus. Orgs. Code § 5.054)
- Must be distinguishable from all existing Texas entities in the Texas Comptroller's Taxable Entity Search and SOSDirect
- A Texas corporate name must include one of the words Corporation, Company, Incorporated, or Limited, or an abbreviation such as Corp., Co., Inc., or Ltd., and must be distinguishable from every name already on file in the SOSDirect records
- Names implying government affiliation or banking activity are restricted
Search the Texas Comptroller's Taxable Entity Search and SOSDirect at mycpa.cpa.state.tx.us before filing. Your name search is not a reservation — the name can be registered by another filer while you prepare your Certificate of Formation.
Name reservation: file a name reservation with the Texas Secretary of State, Corporations Section, $40 fee, holding the name for 120 days. Recommended if your paperwork takes more than a few days to prepare.
Directors, Officers, and Shareholders in a Texas Corporation
A Texas corporation has three distinct roles:
Shareholders own the corporation. They hold stock and vote on major decisions — electing directors, approving mergers, authorizing major asset sales. Shareholders do not manage day-to-day operations.
Directors govern the corporation through a Board of Directors. They set strategic direction, authorize major transactions, and oversee management. Texas's director requirements: A Texas corporation must have at least one director (Tex. Bus. Orgs. Code § 21.403). Directors do not need to be Texas residents or U.S. citizens, and the statute sets no minimum age beyond the capacity to contract. The number of directors on the initial board is fixed in the Certificate of Formation; after formation, the count is set by the bylaws or in the manner the bylaws provide.
Officers (CEO, CFO, Secretary, etc.) manage day-to-day operations. Officers are appointed by the Board of Directors. Texas requires a president and a secretary at minimum, and one individual may hold both offices simultaneously (Tex. Bus. Orgs. Code § 21.417). One person may be the sole director, president, secretary, and only shareholder of a Texas corporation — the standard structure for a solo founder.
Designating a Registered Agent
Every Texas corporation must designate a Registered Agent — a person or entity with a physical Texas street address who receives legal notices, lawsuits, and official state correspondence on behalf of your corporation.
Every Texas corporation must continuously maintain a registered agent with a physical Texas street address; a P.O. box does not qualify (Tex. Bus. Orgs. Code § 5.201). The agent must consent to the appointment in a written or electronic record the corporation keeps on file, and an entity may not serve as its own registered agent. The agent receives service of process and official state correspondence during normal business hours.
If the Texas Secretary of State, Corporations Section cannot deliver legal notices to your Registered Agent, Texas can administratively forfeit the charter of your corporation. LLC Attorney's Texas Registered Agent service is $125/year.
Texas Corporation Costs and Compliance
How to Form a Corporation in Texas
If You Do It Yourself
Step 1 — Choose a corporate name that complies with Texas's requirements.
Your corporate name must be distinguishable from all existing Texas entities and include an approved corporate designator ("Inc.," "Corp.," "Corporation," "Incorporated," or as specified in Tex. Bus. Orgs. Code § 5.054). Search the Texas Comptroller's Taxable Entity Search and SOSDirect at mycpa.cpa.state.tx.us before preparing any documents. Texas name availability is checked against SOSDirect and the Comptroller's Taxable Entity Search, but neither confirms trademark rights — clear the name against the USPTO database separately before you build a brand around it.
Step 2 — Reserve your corporate name (recommended).
File a name reservation with the Texas Secretary of State, Corporations Section, $40 fee, good for 120 days. If you are not filing immediately, this prevents another entity from taking your name while you prepare documents.
Step 3 — Decide your director structure before opening the formation form.
Texas requires 1 director at formation. A single founder can be the only director, the president, and the secretary at the same time. If you expect to bring on co-founders or outside investors, set the initial board size in the Certificate of Formation with that future structure in mind, since changing the authorized number of directors later means amending the bylaws or the certificate. Write down your director names and Texas addresses before you open the form — most state portals cannot save a partially completed filing.
Step 4 — Designate your Registered Agent.
Every Texas corporation must have a Registered Agent with a physical Texas street address. P.O. boxes are not accepted. Founders who do not keep a staffed Texas street address typically use a commercial registered agent. LLC Attorney can act as your Texas Registered Agent, accept service of process, and forward state and legal mail to your client portal.
Step 5 — Complete the Certificate of Formation (Form 201).
Go to sos.texas.gov and use the current version of the Certificate of Formation. Always file directly through the Texas Secretary of State, Corporations Section — outdated forms are rejected without refund. Complete it with:
- Your exact corporate name including designator
- Your Registered Agent — full legal name and physical Texas street address
- Your authorized share structure — authorize a round, easy-to-divide block such as 1,000,000 shares at $0.001 par value, because Texas does not tie any tax to your authorized share count and a clean cap table is simpler to manage
- Director names and addresses
- Incorporator signature (the person submitting the form; need not be a director or shareholder)
- The number of authorized shares and their par value, plus whether the corporation will have a board of directors or be managed by its shareholders (Form 201 asks you to elect one)
Step 6 — File the Certificate of Formation and pay the $300 fee.
File online at filing.sos.state.tx.us or by mail to the Texas Secretary of State, Corporations Section in Austin. Online processing is same business day when filed online through SOSDirect under normal volume.
- 24-hour service: $50 additional (total: $350)
- Next-Day / Same-Day: $500 / $750 additional (total: $800 / $1,050)
- Effective October 1, 2025, Texas replaced its old flat $25 expedite fee with tiered Texas Express service: $50 per document for Standard Expedited (2–3 business days), $500 for Next-Day, and $750 for Same-Day; online SOSDirect submissions still process the same business day, so paying to expedite is rarely needed.
Step 7 — Wait for your approved Certificate of Formation.
Your corporation does not legally exist during the review period. You cannot open bank accounts, sign contracts as the corporation, or issue stock until the Texas Secretary of State, Corporations Section approves your filing. Standard processing is same business day when filed online through SOSDirect; 5 to 7 business days for paper filings submitted by mail during peak filing season. Keep your approved Certificate of Formation — every bank, licensing board, and counterparty will request it.
Step 8 — Hold your organizational meeting and adopt bylaws.
After approval, your Board of Directors must hold an organizational meeting (or sign a written consent in lieu of meeting) to adopt bylaws, elect officers, authorize the bank account, authorize stock issuance, and set the fiscal year. Texas does not require bylaws to be filed with the Secretary of State — keep them with your corporate records. Texas bylaws are adopted by the board or, before directors are elected, by the incorporator, and they govern day-to-day authority under Chapter 21 of the Business Organizations Code; draft them to match how you actually intend to run the company rather than relying on filler clauses. A generic template may omit Texas-specific provisions and may not align with your share structure.
Step 9 — Issue stock to founders.
Authorize and issue shares to founders immediately after your organizational meeting. Document the issuance in your stock ledger and issue stock certificates (or maintain uncertificated share records). Each founder's share count and issuance price must be documented. Texas imposes no franchise tax or annual fee based on authorized shares, so you can size the block to fit your equity plan rather than a tax formula. A common starting structure is 1,000,000 authorized shares with a low par value, leaving room for founders, an option pool, and future investors without an early amendment.
Step 10 — File your initial Public Information Report (Form 05-102) within by May 15 of the year after the corporation is formed.
After your Certificate of Formation is approved, you have by May 15 of the year after the corporation is formed to file Form 05-102 with the Texas Secretary of State, Corporations Section. This filing confirms your Registered Agent address, principal office address, and director and officer contact information. Filing fee: $0 (no separate filing fee). Missing the deadline triggers a $50 report penalty plus tax penalties and interest if franchise tax is owed penalty.
Step 11 — Apply for your federal EIN.
Your corporation needs an EIN to open a bank account, hire employees, and handle tax filings. Apply at irs.gov/ein. Free, no government filing fee. Available Monday through Friday, 7 a.m. to 10 p.m. Eastern. 15-minute inactivity timeout — have all information ready before starting. International incorporators without a U.S. SSN or ITIN must apply by phone (IRS Form SS-4, 267-941-1099).
Step 12 — Open a corporate bank account.
Required documents: your approved Certificate of Formation, your EIN confirmation letter (IRS Form CP 575 or SS-4 approval), your adopted bylaws, a board resolution authorizing the account, and personal ID of authorized signers. Call ahead — bank requirements for corporations are more involved than for LLCs.
Step 13 — Register for Texas state taxes.
Your federal EIN does not automatically register you with Texas state agencies. Depending on your business type:
- Texas sales and use tax (Texas Comptroller of Public Accounts, if you sell taxable goods or services) — comptroller.texas.gov
- Texas employer payroll taxes (Texas Workforce Commission, if hiring Texas employees) — twc.texas.gov
- Texas sales and use tax permit (Comptroller) — required before selling taxable goods or services in Texas; there is no corporate or personal income tax to register for
Step 14 — Pay your Texas annual tax.
Texas franchise tax is reported to the Comptroller of Public Accounts by May 15, not to the Secretary of State. A corporation with annualized total revenue at or below roughly $2.65 million owes no tax but must still file its franchise report and Public Information Report electronically through the Comptroller's Webfile system. Above the threshold, calculate taxable margin (the lowest of several statutory methods), then apply 0.75% — or 0.375% if you qualify as a wholesaler or retailer. Pay online through Webfile; there is no flat minimum tax for entities under the threshold.
Step 15 — Decide whether to elect S-Corp tax treatment.
C-Corporation income is taxed twice: once at the corporate level (federal rate currently 21%), and again when distributed to shareholders as dividends. An S-Corp election converts the corporation to pass-through taxation. S-Corp election is available for Texas corporations that meet IRS eligibility: 100 or fewer shareholders, all U.S. citizens or residents, only one class of stock, and no institutional or foreign shareholders. File IRS Form 2553 within 75 days of formation. The election is made with the IRS — it does not require any Texas filing. A federal S-Corp election changes how the IRS taxes the corporation, but it does not exempt the entity from the Texas franchise tax. Texas taxes the corporation at the entity level regardless of its federal pass-through status, so an S-Corp with revenue above the no-tax-due threshold still owes margin tax. Because Texas has no personal income tax, the main benefit of the S-Corp election here is federal — primarily reducing self-employment tax on a reasonable-salary-plus-distribution structure.
Step 16 — Set annual compliance reminders.
Texas corporations must file and pay on a recurring basis:
- Public Information Report (Form 05-102): Annually by May 15, filed with the Texas Comptroller rather than the Secretary of State, $0 (no separate filing fee) fee — $50 report penalty plus tax penalties and interest if franchise tax is owed if missed
- Franchise tax and Public Information Report: due May 15 each year to the Comptroller; $0 for corporations under the ~$2.65M no-tax-due threshold, then 0.75% of taxable margin (0.375% wholesale/retail)
Missing these filings puts your corporation in bad standing with the Texas Secretary of State, Corporations Section and Texas Comptroller of Public Accounts. Suspension means you cannot file documents, defend lawsuits, or do business in Texas. If you would rather not manage this process, the service handles Texas corporation formation starting at $49.
If LLC Attorney Does It for You
- Submit your information at llcattorney.com — corporate name, director structure, authorized shares, Registered Agent preference, fiscal year, and target formation date. No forms to find or download.
- LLC Attorney files your Certificate of Formation with the Texas Secretary of State, Corporations Section, drafts your bylaws, handles your organizational meeting consent, issues your stock ledger documentation, applies for your EIN, and covers same-day filing if needed. Your Registered Agent designation and initial Public Information Report are included.
- Receive your approved Certificate of Formation, bylaws, organizational consent, stock documentation, and EIN confirmation through your LLC Attorney client portal. Annual compliance reminders are included so you never miss a Form 05-102 deadline or annual tax payment.
S-Corp Election for Texas Corporations — What You Need to Know
An S-Corp election is not a separate entity — it is a federal tax election made by an existing corporation. Your Texas corporation remains a Texas corporation; you are only changing how the IRS taxes it.
The S-Corp tax advantage: a C-Corp pays 21% federal corporate income tax on net income, and shareholders pay income tax again on dividends. An S-Corp passes income directly to shareholders' personal returns, skipping the corporate-level tax. For owner-operated businesses with consistent profitability above roughly $40,000/year, the S-Corp election typically produces material tax savings.
S-Corp payroll requirement: if you elect S-Corp status and work in the business, you must pay yourself a "reasonable salary" subject to payroll taxes. The savings come from income above that salary, which passes through without payroll tax. Skip the salary and the IRS can reclassify your distributions as wages and assess back payroll taxes plus penalties.
Eligibility requirements:
- 100 or fewer shareholders
- All shareholders must be U.S. citizens or permanent residents
- Only one class of stock (identical distribution and liquidation rights)
- No institutional shareholders, partnerships, or non-resident alien shareholders
Texas treatment of S-Corps: A federal S-Corp election changes how the IRS taxes the corporation, but it does not exempt the entity from the Texas franchise tax. Texas taxes the corporation at the entity level regardless of its federal pass-through status, so an S-Corp with revenue above the no-tax-due threshold still owes margin tax. Because Texas has no personal income tax, the main benefit of the S-Corp election here is federal — primarily reducing self-employment tax on a reasonable-salary-plus-distribution structure.
Filing deadline: IRS Form 2553 must be filed within 75 days of formation, or by March 15 of the tax year for which you want the election effective. Late elections are sometimes accepted with a written explanation of reasonable cause.
When Should You Consult an Attorney for Your Texas Corporation?
LLC Attorney provides on-demand attorney consultations for a flat rate per 30-minute session — no retainer required. Corporation formation benefits from attorney guidance more than most entity types because of share structure, bylaw complexity, and S-Corp election timing. Common scenarios:
- Multiple founders or investors: share structure decisions made at formation (authorized shares, classes, par value) affect every future financing round and exit. A misstructured cap table is expensive to unwind.
- S-Corp election analysis: whether to elect depends on projected net income, payroll requirements, and state-level S-Corp recognition. The payroll requirement catches founders off guard.
- High-liability industry: regulated industries may have specific corporate structure requirements from licensing boards or insurance carriers.
- Raising capital: if you plan to raise institutional capital, your share structure, option pool, and Delaware vs. home-state decision should be reviewed before you file.
- Texas-specific wrinkles: Texas may have corporate law provisions a generic national template does not cover correctly.
Is Texas a State Where Legal or Tax Advice Matters More for Corporations?
Texas's appeal is its no-income-tax environment, but the franchise (margin) tax has several computation methods, and the right one can materially change what a profitable corporation owes once it clears the no-tax-due threshold. An attorney or CPA can confirm whether a C-Corp or an S-Corp election fits your cap table, choose the margin calculation that minimizes tax, and make sure the Public Information Report and franchise filings with the Comptroller stay current so the corporation keeps its right to transact business.
What You Actually Get When You Incorporate in Texas with LLC Attorney
A Texas corporation that has only been filed with the Secretary of State is not a finished corporation. The state filing creates the entity; it does not produce the bylaws, organizational consents, or stock records that make the corporation function and keep the liability shield intact. A "$0 filing" that skips those pieces is not actually free — it is unfinished, and in Texas an unfinished corporation is also the one most likely to miss its first May 15 Comptroller deadline.
Included with LLC Attorney corporation formation, starting at $300:
- Same-day or 24-hour Texas filing at no markup on the state fee. Most services charge extra to expedite.
- Attorney-drafted bylaws, initial board consent, and organizational minutes — customized, not auto-generated templates.
- Initial stock issuance and cap-table setup, so your ownership is documented correctly from day one.
- Federal EIN, obtained for you.
- Texas Registered Agent service at $125/year, included to keep you in good standing.
- S-Corp election guidance when pass-through tax treatment is the right call for your situation.
- Access to attorney-trained Business Success Advisors at no charge, plus optional flat-fee attorney consultations (no retainer).
Because Texas's value is its no-income-tax structure rather than a low filing cost, what matters is staying current with the Comptroller — so a documented cap table, clean bylaws, and a tracked May 15 deadline are exactly what is included here.
Starting Your Texas Corporation with LLC Attorney
Texas's corporate formation requirements are simple to file but carry an ongoing margin-tax obligation — the franchise (margin) tax computation methods, the no-tax-due threshold, and the May 15 Comptroller filings that continue even when no tax is owed. Getting your directors, share structure, bylaws, and initial compliance filings right at formation prevents expensive corrections later.
The service handles Texas corporation formation starting at $49. Same-day filing is available at no markup on state fees. On-demand attorney consultations in 30-minute increments — no retainer — cover bylaws drafting, S-Corp election analysis, Texas franchise-tax method selection and C-Corp versus S-Corp planning, and annual tax planning. See our full pricing for all service tiers.
Frequently Asked Questions
Certificate of Formation filings submitted online through SOSDirect are processed the same business day. Paper filings sent by mail take roughly 5 to 7 business days under normal volume. Since October 1, 2025, Texas Express expedited service adds $50 per document for Standard Expedited, $500 for Next-Day, or $750 for Same-Day, but online submissions are already immediate, so expediting is rarely necessary. LLC Attorney files online to hit time-critical formation dates.
A C-Corp and an S-Corp are the same Texas corporation — the difference is federal tax treatment only. A C-Corp pays corporate income tax at the entity level (21% federal rate), and shareholders pay personal income tax again on dividends. An S-Corp elects pass-through taxation — income flows to shareholders' personal returns without corporate-level tax. The election is made with the IRS via Form 2553 and has no impact on your Texas formation documents. Remember that the S-Corp election affects only federal tax; the Texas franchise tax applies to the corporation either way.
Yes. Texas allows a single individual to own and run a corporation, serving as the sole director, the president, and the secretary at once (Tex. Bus. Orgs. Code § 21.417 permits one person to hold both required offices). You will still need to keep up corporate formalities — adopt bylaws, sign an organizational consent, issue yourself stock, and keep corporate funds separate from personal funds — to preserve the liability shield.
Texas does not levy a corporate income tax or a personal income tax. A Texas corporation instead pays the franchise (margin) tax to the Comptroller: $0 if annualized total revenue is at or below the no-tax-due threshold (about $2.65 million for 2026), otherwise 0.75% of taxable margin, or 0.375% for qualifying wholesale and retail businesses. Every taxable corporation files a Public Information Report by May 15 regardless of whether tax is owed. At the federal level, a C-Corp pays the 21% corporate income tax unless it elects S-Corp treatment.
Texas corporations do not file an annual report with the Secretary of State. Instead, every taxable corporation files a Public Information Report (Form 05-102) with the Texas Comptroller of Public Accounts by May 15 each year, alongside its franchise tax report. The PIR carries no separate fee, but filing it late triggers a $50 penalty even when no franchise tax is due. The two agencies are independent, so a corporation can be active with the Secretary of State while delinquent with the Comptroller.
Texas does not require corporations to file bylaws with the Secretary of State. However, bylaws are a legal requirement for corporate governance — they define how your board operates, how shareholder meetings work, how officers are appointed, and how major decisions are made. A corporation without bylaws is technically non-compliant and lacks the foundational document that governs all major corporate decisions. Every bank, investor, and serious counterparty will request your bylaws.
Filing the franchise report or Public Information Report after May 15 triggers a $50 late-filing penalty even when no tax is due. If franchise tax is actually owed, the Comptroller adds a 5% penalty (rising to 10% once the report is more than 30 days late) plus statutory interest. Continued non-compliance leads the Comptroller to forfeit the corporation's right to transact business in Texas, and reinstatement requires clearing all back reports, tax, penalties, and interest.
Yes. A Texas corporation can convert to an LLC by filing a Certificate of Conversion together with the new entity's Certificate of Formation with the Secretary of State, and by settling any franchise tax obligations with the Comptroller first. The conversion is generally a taxable event for federal purposes and can trigger gain recognition, so model the consequences with a CPA before filing. An attorney consultation can map the most tax-efficient path for your situation.
If Texas is unable to deliver legal notices to your Registered Agent, the state can administratively forfeit the charter of your corporation. This can happen without direct notice to you. A professional Registered Agent service ensures a qualified person is available during business hours at a physical Texas address to receive any legal documents on your behalf.