How Much Does It Cost to Form a Corporation in Texas?
Legal business registration — and keeping your business in good standing — involves necessary expenses and investment. Some of these costs are payable to the Secretary of State, while others are due to additional state entities or the federal government. Here are some common requirements and fees.
Please note that fees for a permit or business license in Texas may be due when you first form your business, on an ongoing schedule or on an ad hoc basis. Find more details below.
Initial Texas Corporation Filing Fee
When setting up a corporation in Texas, you’ll need to file a form and pay a filing fee. Here are the current Texas corporation fees and filing times:
When you use Incfile to form a corporation in Texas, we charge you the state filing fee and forward it to the Secretary of State when we file your incorporation paperwork.
Employer Identification Number
Every corporation in the country should have a unique EIN (Employer Identification Number) from the Internal Revenue Service. You'll use it when you open a business bank account, file taxes and pay employees. You can get one directly from the IRS, or Incfile can get one for you.
If you want to do business in a state other than the one where your business is based, you must create a Foreign Corporation.
Texas Foreign Corporation Registration
Before you can bring an arm of your business from another state into Texas, you must request Foreign Qualification in Texas. This means the state gives you permission to conduct business there.
To request registration of a Texas Foreign Corporation, you must complete an Application for Registration of a Foreign For-Profit Corporation and pay a processing fee of $750. The state may have additional registration requirements, so contact the Secretary of State directly for more information and to ensure you're in compliance with state law.
Foreign Qualification to Operate in Another State
If you plan to expand your Texas corporation into another state, you’ll first need Foreign Qualification or a Certificate of Authority from that state. This is necessary before you can create a physical presence, hire employees or bank in that state.
You'll likely have to complete at least one application and pay a filing fee, but each state has its own requirements. Before you start the process, compare state filing times and state filing fees so you can plan accordingly.
Above all, contact the state government entity that administers business (usually the Secretary of State) to confirm their requirements and for specific instructions. If you need assistance, Incfile provides a complete Foreign Qualification service for all states.
Texas Annual Report Requirements
Most states require business entities to file an annual (or other periodic) report. Texas is a little different in that it has two annual report requirements:
The Public Information Report is actually part of your franchise tax reporting. You'll find more information about the necessary Texas Secretary of State forms and reporting requirements in the TX franchise tax section on the business taxes page of this guide.
Texas Business Licenses and Permits
Before you start doing business, you must secure the necessary state, federal or local business licenses and permits to operate your corporation. Some of the fees will only need to be paid once, while others may be ongoing charges.
Permits and licenses vary based on:
You're not legally required to have Texas corporation bylaws.
The bylaws must then be adopted (and amended, if necessary) by the board of directors and shareholders.
Despite their not being legally required, a set of bylaws can be extremely helpful in making sure you’re organized and can help protect your business from any future changes and events that may affect your business.
Other Texas Corporation Filing Requirements and Fees
The State of Texas requires you to complete a few more tasks before you can begin conducting business.
Appoint a Director
Some states require corporations to appoint a full board of directors. Texas corporation law requires all corporations to have at least one director, as well as one president and one secretary. A single person can be the president, secretary, sole director and sole shareholder.
In Texas, the board of directors (or the single director) elects officers, such as the president, CEO, etc. Texas corporation law requires corporations to have at least a president and one secretary. A single person can be the president, secretary, sole director and sole shareholder.
Issue Stock to Shareholders
To raise business capital and keep it separate from company owners' money, every corporation in the state must sell stock to its shareholders. The Certificate of Formation must authorize the sale of at least one share, and the corporation cannot sell more shares than are authorized.
Hold Annual General Meetings
This is one area where Texas differs from other states. You may hold annual meetings, and it's generally a good idea to do so. But if you decide not to, Texas BOC Title 2, Chapter 21, Subchapter H, § 21.351 states, "The failure to hold an annual meeting at the designated time does not result in the winding up or termination of the corporation."
Change the Registered Agent
If your corporation is based in Texas, then you must have a Registered Agent in Texas. You'll need to appoint one when you file your Certificate of Formation. You can also change to a new Registered Agent later by filing a form and paying a fee of $15.
Reserving a Name for Your Corporation
If you're not quite ready to start your business, you can reserve a name for 120 days with the Secretary of State by filing a form and paying a fee of $40. First, conduct a Texas corporation search and learn the state's business naming rules to ensure you choose a name that meets legal requirements.
Amending Facts About Your Corporation
When you incorporate, the Texas Secretary of State forms you fill out include certain facts about your business at that time. Through the years, some or all of this information may change. If it does, you'll need to file a Certificate of Amendment with the Secretary of State along with a filing fee of $150. You can do this yourself or Incfile can do it for you.
Get a Certificate of Good Standing
Some organizations may request that you prove your corporation's compliance with laws and tax requirements. In most states, this proof is provided with a Certificate of Good Standing or Certificate of Existence. In Texas, it's called a Certificate of Fact - Status.
If you need to prove you have met your commitments, you’ll need to request a Texas Certificate of Fact - Status from the Secretary of State. You can do this via the state's online portal for a fee of $15.
Note: The state no longer uses the term "Certificate of Good Standing." They now refer to that document as a "Certificate of Account Status," which is issued by the state Comptroller, not the Secretary of State, and provides information about an entity's franchise tax account status. However, "Certificate of Good Standing" is still sometimes used by the state's Comptroller of Public Accounts in reference to an entity's Texas franchise tax status.
The information listed above details many of the fees a standard corporation will be required to pay in Texas. In some circumstances, there may be other one-off, periodic or ad hoc fees not listed above. Of course, your corporation will also probably need to pay federal, state, self-employment (if it's an S Corp) and other taxes. You'll find more information on the Texas taxes page.