Tips on Texas Incorporation.

Incorporating a business in Texas entitles business owners to plenty of benefits that push companies to improve, recoup investments and expand operations. But there are a few things one must comply with, before starting a business in Texas. In this state, all operations have to undergo legal documentation for the incorporation to be completed.

Below are important things you should know, when considering incorporation in Texas:

1. The incorporation policy of the State is more concerned on procedures. It would be to your advantage if you consider hiring an advisor or an agent who will be able to guide you on these matters. Your agent will also have to register your company name and other copyrights to protect your business interest in the state. He or she will also have to receive and forward legal documents and forms of the company, and must carry a legal address, not a post box office address.

2. These are the types of corporation you can register in Texas:

• If you apply as a Subchapter S Corporation, you don't need to pay for corporate income tax. To qualify for this, you need to file form 2553 with the IRS and provide them a copy of your tax return. However, S Corporation status may have problems getting recognised in the Texas state.
• If you apply as a non-profit corporation, or those that are organised for philanthropic objectives, you will need to provide an affidavit - Article of Formation - to the Secretary of State. They will then send you a ratified copy of this via your agent.
• If you apply as a C Corporation, you will be entitled to limited liability. C Corporations are required by Texas law to issue shares to at least thirty individuals for the purpose of raising or increasing the corporation's capital.

3. Get the necessary business license and pay the corresponding fees for this. You must also register your business name. It should carry either the following words: incorporated, company, corporation, or its abbreviated forms. It should not carry the word lottery. Your chosen business name must not be similar to an already registered company.

4. The corporation may have a minimum number of one director who is at least 18 years old. The names of the directors are to be included in the articles of incorporation. The name of the officers, though, may not be listed. There are neither provisions nor requirements on residency but corporate records including stocks records, are to be kept in the main office.

5. Corporations are required to file their franchise tax returns. This is computed in two ways: 1) 4.5% of the net taxable surplus and 2) .25% of the net taxable capital. If the taxable amount is $100 or less, the corporation need only pay that same amount to cover the franchise tax.

6. Your articles of incorporation must have the following:

• Official instructions as well as checklist, as provided by the Texas government
• The Articles of Incorporation, as per forms provided by the state Secretary.
• The cover letter for submission when filing the articles of incorporation

7. Corporations are required to file annual statements.

Overall, the cost of incorporation in Texas will be about $600 and the process takes at least a month (longest period) to complete.