ICIncorporate Counsel

TX · formation guide

Incorporating in Texas

Best when Texas is where you actually do business.

All states

Who this state fits

Companies with Texas customers, employees, property, or a physical location.

Multiple companies: Common as an operating subsidiary under an out-of-state parent, or as a Texas series LLC when properties are all in Texas.

Pros

  • No personal income tax and a large, business-friendly economy
  • New Texas Business Court adds specialized commercial adjudication
  • No annual report fee — only the franchise tax report
  • Avoids the cost and hassle of foreign-qualifying if you operate in Texas
  • Strong series LLC statute

Cons

  • $300 formation fee is high relative to Wyoming or New Mexico
  • Public disclosure of governing persons — little privacy
  • Franchise tax reporting obligation every year even when no tax is owed
  • Some local jurisdictions add their own permits and gross-receipts style fees

Filing walkthrough

  1. 1

    Check the name in SOSDirect

    Texas rejects names that are not clearly distinguishable — check before filing.

  2. 2

    Get registered agent consent

    Form 401-A consent should be kept in your records (not filed).

  3. 3

    File Form 205 (LLC) or Form 201 (corporation)

    File through SOSDirect or by mail with the $300 fee.

  4. 4

    Adopt the operating agreement or bylaws

    Internal document; define management type, capital, and distributions.

  5. 5

    Get your EIN and register with the Comptroller

    Franchise tax webfile account, plus sales and use tax permit if you sell taxable goods or services.

  6. 6

    Calendar May 15

    Annual franchise tax report and public information report are due each May 15.

After the state approves your filing, continue with the EIN and tax walkthrough.