How to Form a C Corporation in Texas

Introduction

If you’re a small business owner, you might be looking for ways to grow your company. You might want to consider forming a C corporation in Texas. It’s easier than it sounds, but there are steps you need to take before filing the paperwork with the state government. In this guide, we’ll show you how to form a C corporation so that you can get back to focusing on your business and not on the legal stuff.

Draft your articles of incorporation.

The articles of incorporation is the first step to forming a corporation. The articles must be filed with the Secretary of State, who will then issue an official Certificate of Incorporation. The document should contain:

• The name of the corporation (which cannot conflict with another entity’s name)
• A statement about what business you’re conducting and how long it will last (usually between 20 and 100 years)
• The names and addresses of all incorporators

File your articles of incorporation.

The next step is to file your articles of incorporation with the secretary of state in Texas. You will need to pay a fee and have your signatures notarized by an attorney who has been licensed in Texas for at least three years, or who is an employee of the secretary of state’s office. You also will need to have your articles of incorporation notarized by an officer at a local bank, credit union or savings and loan association that operates in Texas.

Create corporate bylaws.

When you’re forming a corporation, you’ll need to create corporate bylaws. Corporate bylaws are legally binding documents that establish the rules of operation for your company. They explain how your corporation will be run and govern its relationship with other companies and people.

Bylaws can vary greatly depending on their purpose, but most include information about:

• Board of directors—a group of individuals who oversee day-to-day operations of the company and make decisions regarding major issues facing the organization. The board may have as few as three members or as many as 15. In some states, it’s required for there to be at least one director who is not an employee or owner of the company (known as an independent director).
• Shareholders’ meetings—periodic gatherings at which shareholders vote on important business matters such as electing new directors and approving major expenditures like buying property or equipment; they do not need to occur annually unless specified by state law or corporate charter (the document outlining how a company will operate). Should these regular meetings be held electronically? You could get around this requirement by having annual ones where everyone votes using online voting software instead!
• Special shareholders’ meetings—special ones called when needed when something urgent needs attention without going through all those pesky red tape hoops.”

Hold your first meeting.

You may not think it, but the first thing you need to do to start up your corporation is hold a meeting. This is where you create the company, elect officers and directors and set their initial terms of office.

You can hold your initial meeting by telephone or in person, but it must be done before you file your articles of incorporation with the secretary of state.

The meeting must be documented through either written resolutions or minutes kept as part of your corporate record book.

Register with the state and federal governments.

• Register with the state. Go to the Texas Comptroller’s website, and click “New Entity Registration.” Enter the information required for your entity type, including its name and tax ID number. You’ll pay a $40 filing fee.
• Register with the federal government. You’ll need an Employer Identification Number (EIN). You can get one by visiting a local IRS office or mailing in Form SS-4 and paying a small fee via check or money order, or you can request one online using an EIN application form on the IRS website.

Apply for an employer identification number.

To apply for an EIN, you must file IRS Form SS-4 and provide identifying information about your business. This includes the names and addresses of all owners, officers and directors, as well as a description of their roles at the company. You can submit an online application or mail in a paper version (available online). Once you receive your EIN from the IRS, make sure to keep it safe — it’s not re-issued if it’s lost.

In addition to allowing your corporation to open bank accounts and pay taxes on its own behalf, an EIN is also required when applying for state licenses related to business operations such as alcohol permits or food service licenses

Open a corporate bank account.

Once you’ve opened a corporate bank account, make sure that your business bank has the following features:

• FDIC insurance. Before you open an account, check to see if the bank is FDIC insured. This ensures that your money will be protected up to $250,000 if anything happens to the bank.
• Online banking and bill pay. If you want to keep track of transactions in real time and make payments via computer or other electronic device, look for a financial institution that offers online banking services as well as paperless bill payment options.
• Corporate checking account and savings accounts: Most banks offer these types of accounts specifically designed for businesses with multiple employees or owners (and sometimes both). Look into options offered by different institutions before settling on one location; they often vary depending on what part of Texas they’re located in and how much money they’re willing or able put behind providing this kind of service

The process of forming a C corporation in Texas is straightforward.

The process of forming a C corporation in Texas is straightforward. If you’re interested in doing it yourself, there are plenty of resources available to help you get started. You can also hire an attorney or accountant to do the work for you—the choice is up to you!

If you don’t want to set up a traditional corporation and still want some of the benefits associated with them (such as limited liability), consider forming an LLC or S corporation instead.

Conclusion

Congratulations! You’ve completed all the steps to form a C corporation. Now, you’re ready to begin business operations and start earning profits for your shareholders. Remember that you must abide by state and federal laws as well as any local regulations that apply to your industry or type of business operation.