A corporation is a type of business, similar to a partnership or sole proprietorship. There are various reasons why a person or group would want to incorporate their Texas-based business, as corporations offer certain legal protections and other important benefits. Forming a Texas corporation requires that business owners follow a specific procedure. Failure to do so can result in delays in the process. To avoid legal and costly complications, entrepreneurs may want to consider working with business incorporation lawyers or business law attorneys who can assist with the incorporation process and see that it is done correctly.
Forming a Texas Corporation
A corporation in Texas is overseen by the Corporations Section of the Office of the Secretary of State. To become a legal corporation, companies must submit a completed Certificate of Formation to this office, including important information such as the chosen name of the corporation or business entity, the address of the entity, and the purpose for its formation. The names and addresses of the organizers of the entity and other pertinent details must also be included. A filing fee is paid upon submission of these documents.
Choosing A Name
Since corporations are somewhat different than other types of businesses, lawyers who assist clients with business incorporation advise that there are specific requirements when deciding upon a name. The chosen name must not already be in use and most importantly, the name must include the words “company,” “corporation,” “limited,” “incorporated,” or an abbreviation of these to qualify.
To become incorporated in Texas, a corporation must have at least one assigned director. Business law attorneys explain that it is not necessary for the director to also be a shareholder, or to live within the state. The names of all directors must be provided on the Certificate of Formulation and create a corporation’s bylaws under which the company will operate. These directors must then hold a legally required organizational meeting and perform other important duties necessary for the initial formation.
Banking, Licenses, Taxes and Other Requirements
A corporation, like any other business, must have its own bank account under its corporate name. Businesses must also obtain an Employer Identification Number (EID) from the IRS and any required local business licenses. Texas corporations must adhere to a number of important employment and tax regulations as well. Once a Board of Directors is in place, along with the corporation’s bylaws, the corporation can then issue its first stocks to initial investors and owners as part of the company formulation process. There are also a number of other requirements that must be fulfilled during the incorporation process.
There are many benefits to forming a Texas corporation. In order for a business to be acknowledged as a corporation, that business must complete a number of specific tasks. The easiest way to accomplish these tasks, and ensure that all incorporation rules and requirements are met, is to seek the counsel of business law attorneys experienced with the process. Business incorporation lawyers can play an important role in helping new corporations get off the ground as smoothly as possible.
Peterson Law Group – Main Office
College Station TX 77840