Texas Incorporation, LLC, and Not-for-Profit Information

Nickname:The Lone Star State

Capital: Austin

Following please find a guide of state information with reference to the registration of a Texas Corporation, LLC and Not-For-Profit company. Please click on the tab to the corresponding Texas entity for which you would like additional information. You will find information on items such as company name, filing document, annual report and taxation requirements. Please contact us for more information or to place an order.

Company Name:

The name shall contain the word "corporation", "incorporated" “company” or "limited" or an abbreviation of one of such words, "Inc.", "Corp." or "Ltd."

The name shall be as such to distinguish it from the names of other companies of any kind. The Texas Secretary of State does not allow a new company name to have the same first two words as another company on record, unless the organizing company obtains written consent from the company on record. The name cannot contain words or phrases which indicate that it is being formed for any other purpose then stated in the Certificate of Incorporation.

The following words or phrases are either prohibited or restricted and may require consent from the associated department prior to filing with the Department of State: Lottery, College, School, Seminary, Bank, Trust, Veterans and War.

Company names in Texas can be reserved for 120 days.

Formation Document:

The formation document required to file a corporation in Texas is called the Certificate of Formation. The information listed in the Certificate of Formation includes, but not limited to, the name of the company, purpose, name and address of initial directors, shares, par value, and registered agent name and address.

Professional Corporations:

Texas law does allow for the formation of Professional Corporations (PC's).

Directors/Officers:

Corporations are managed by their Board of Directors. The minimum number of directors required in Texas is 1 and there is no age requirement. The Board of Directors elects the company officers, President, Vice President (if applicable), Secretary and Treasurer. The terms of office are stipulated in the company bylaws.

Bylaws:

The company bylaws regulate the way in which your company will be run. The bylaws are adopted at the initial meeting of the directors and are updated as needed. Included in the bylaws will be information on director/shareholder meetings, voting responsibilities, stock issue procedures and other operating procedures.

Corporations may be required and should keep the bylaws available for review at their principal place of business along with the names and addresses of directors, officers and shareholders, minutes of all director and shareholder meetings, records of actions taken by directors or shareholders without a meeting, record of all shareholders and their number and class of shares, a copy of the formation document and any amendments thereto, and the company’s most recent annual report.

Annual Requirements:

All Texas corporations will be required to file an annual report with the Texas Comptroller. The annual report is due each year by May 16th starting the year after formation. Failure to file the annual report may result in the company becoming inactive.

Assumed Name DBA:

Corporations can register an Assumed Name (DBA) with the Department of State but must also file a separate Assumed Name Certificate with the county where the main office of the registered business is located.

All other entities such as sole proprietorships file an Assumed Name Certificate directly with the county clerk in the county where the business is primarily located.

Dissolution:

The Business Corporation Law provides a procedure for voluntarily dissolving a domestic corporation by filing a Certificate of Termination, pursuant to chapter 11 of the Texas Business Organizations Code (BOC), with the Texas Department of State.

The certificate of termination must be accompanied by a certificate of account status from the Texas Comptroller of Public Accounts indicating that all taxes under title 2 of the Tax Code have been paid and that the entity is in good standing for the purpose of termination.

Taxation:

New entities should obtain a Federal Tax Identification Number (FTIN), also known as an Employer Identification Number (EIN), from the IRS. This number will be required to open bank accounts, have employees, apply for business licenses, file tax returns, etc. Visit http://www.irs.gov for more information on federal tax requirements.

Further, if your corporation wants to apply for S-Corporation Election it should be applied for right after formation. In Texas an application for S-Corporation Election status is not recognized.

As all companies are different and have specific filing requirements we suggest that you speak with a tax professional to provide you with tax advice prior to organizing your company. For general tax information you can contact the Texas Comptroller of Public Accounts at http://www.cpa.state.tx.us.

Company Name:

The name shall contain, without abbreviation, the words "Limited Liability Company," "Limited Company," "Ltd. Co.," "LC," "LLC" or "L.L.C."

The name shall be as such to distinguish it from the names of other companies of any kind. The Texas Secretary of State does not allow a new company name to have the same first two words as another company on record, unless the organizing company obtains written consent from the company on record. The name cannot contain words or phrases which indicate that it is being formed for any other purpose than then stated in the Articles of Organization.

The following words or phrases are either prohibited or restricted and may require consent from the associated department prior to filing with the Department of State: Lottery, College, School, Seminary, Bank, Trust, Veterans, or War.

Company names in Texas can be reserved for 120 days.

Formation Document

The formation document required to file an LLC in Texas is called the Articles of Organization. The information listed in the Articles of Organization includes, but not limited to, the name of the company, purpose, the governing authority, and registered agent name and address.

Professional LLC's

Texas law does allow for the formation of Professional LLC's (PLLC's).

Members/Managers

LLC's are managed by one or more members/managers. The members are like the shareholders of a corporation and are the owners of the company. The managers are like the officers of a corporation and run the company on behalf of the members. The minimum number of members required in Texas is 1, there is no age requirement and the company can be member managed. The terms of office of the members/managers are stipulated in the company operating agreement.

Operating Agreement

The company operating agreement regulates the way in which your company will be run. The operating agreement is adopted at the initial meeting of the members and is updated as needed. Included in the operating agreement will be information on member/manager meetings, voting responsibilities, membership interest and other operating procedures.

Annual Requirements

All Texas LLC's will be required to file an annual franchise tax and information report with the Texas Comptroller. The statement will request updated information on the address and member information. The report is due May 15th and are available online for filing. Failure to file the annual report may result in the company becoming inactive.

The LLC must also keep detailed records of the company members, managers, articles of organization, operating agreement and tax returns for inspection at its principal office.

Assumed Name DBA

LLCs can register an Assumed Name (DBA) with the Department of State but must also file a separate Assumed Name Certificate with the county where the main office of the registered business is located.

All other entities such as sole proprietorships file an Assumed Name Certificate directly with the county clerk in the county where the business is primarily located.

Dissolution

The Business Corporation Law provides a procedure for voluntarily dissolving a domestic LLC by filing a Certificate of Termination, pursuant to chapter 11 of the Texas Business Organizations Code (BOC), with the Texas Department of State.

The certificate of termination must be accompanied by a certificate of account status from the Texas Comptroller of Public Accounts indicating that all taxes under title 2 of the Tax Code have been paid and that the entity is in good standing for the purpose of termination.

Taxation

New entities should obtain a Federal Tax Identification Number (FTIN), also known as an Employer Identification Number (EIN), from the IRS. This number will be required to open bank accounts, have employees, apply for business licenses, file tax returns, etc. Visit http://www.irs.gov for more information on federal tax requirements.

As all companies are different and have specific filing requirements we suggest that you speak with a tax professional to provide you with tax advice prior to organizing your company. For general tax information you can contact the Texas Comptroller of Public Accounts at http://www.cpa.state.tx.us.

Company Name:

The name are not required to use the word "corporation", "incorporated" or “company” an abbreviation of one of such words, "Inc.", "Corp." or "Co." but are allowed to be used if desired.

The name shall be as such to distinguish it from the names of other companies of any kind. The Texas Secretary of State does not allow a new company name to have the same first two words as another company on record, unless the organizing company obtains written consent from the company on record. The name cannot contain words or phrases which indicate that it is being formed for any other purpose then stated in the Certificate of Formation.

The following words or phrases are either prohibited or restricted and may require consent from the associated department prior to filing with the Department of State: Lottery, College, University, School, Seminary, School of Medicine, Medical School, Health Science Center, School of Law, Law Center, Bank, Trust, Veterans, and War.

Company names in Texas can be reserved for 60 days and two name reservation extensions can be filed thereafter.

Formation Document

The formation document required to file a Not-For-Profit corporation in Texas is called the Certificate of Formation. The information listed in the Certificate of Formation includes, but not limited to, the name of the company, specific purpose, names and addresses of the directors, and registered agents name and address.

Directors/Officers

Not-For-Profit corporations are managed by their Board of Directors. The minimum number of directors required in Texas is 3 and they must be 18 years old. The Board of Directors elects the company officers, President, Vice President (if applicable), Secretary and Treasurer. The terms of office are stipulated in the company bylaws.

You can choose to have a members for your Not-For-Profit organization. The members have the exclusive right to elect directors, amend articles and bylaws, and vote on a merger or dissolution of the corporation. A membership structured Not-For-Profit organization normally benefits the members of the organization, such as a club or social organization. A Not-For-Profit organization that does not have members will be governed by its board of directors as is the case with most charitable organizations.

Bylaws

The company bylaws regulate the way in which your company will be run. The bylaws are adopted at the initial meeting of the directors and are updated as needed. Included in the bylaws will be information on director meetings, voting responsibilities, membership requirements and other operating procedures.

NFP corporations may be required and should keep the bylaws available for review at their principal place of business along with the names and addresses of directors and officers, minutes of all director meetings, records of actions taken by directors without a meeting, a copy of the formation document and any amendments thereto, and the company’s most recent annual report.

Annual Requirements

Texas Not-for-profit corporations will be required to file an annual report with the Texas Comptroller. The annual report is due each year by May 16th starting the year after formation. Failure to file the annual report may result in the company becoming inactive.

Assumed Name DBA

NFP Corporations can register an Assumed Name (DBA) with the Department of State but must also file a separate Assumed Name Certificate with the county where the main office of the registered business is located.

All other entities such as sole proprietorships file an Assumed Name Certificate directly with the county clerk in the county where the business is primarily located.

Dissolution

The Business Corporation Law provides a procedure for voluntarily dissolving a domestic NFP by filing a Certificate of Termination, pursuant to chapter 11 of the Texas Business Organizations Code (BOC). The certificate of termination filed by a nonprofit corporation that has completed its winding up process must contain a statement that: (1) any property of the nonprofit corporation has been transferred, conveyed, applied, or distributed in accordance with this chapter and Chapter 22; and (2) there is no suit pending against the nonprofit corporation or adequate provision has been made for the satisfaction of any judgment, order, or decree that may be entered against the nonprofit corporation in a pending suit.

(b) In addition to the statements required by Subsection (a), if the nonprofit corporation received and held property permitted to be used only for charitable, religious, eleemosynary, benevolent, educational, or similar purposes, but the nonprofit corporation did not hold the property on a condition requiring return, transfer, or conveyance because of the winding up and termination, the certificate of termination must include a statement that distribution of that property has been effected in accordance with a plan of distribution adopted in compliance with this code for the distribution of that property.

Taxation

New entities should obtain a Federal Tax Identification Number (FTIN), also known as an Employer Identification Number (EIN), from the IRS. This number will be required to open bank accounts, have employees, apply for business licenses, file tax returns, etc.

In order to apply for tax-exempt status under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3) of the IRS code, and none of its earnings may inure to any private shareholder or individual. The company must file Form 1023 for charitable organizations or Form 1024 for other types of tax exempt organizations in order to apply for tax-exempt status. Visit http://www.irs.gov/Charities-&-Non-Profits for additional information.

As all companies are different and have specific filing requirements we suggest that you speak with a tax professional to provide you with tax advice prior to organizing your company. For general tax information you can contact the Texas Comptroller of Public Accounts at http://www.cpa.state.tx.us.