Certificate of Incorporation Texas: Everything You Need to Know
Certificate of Incorporation Texas refers to the legal document used in Texas to file for incorporation with the Secretary of State of Texas.4 min read
Incorporation in Texas
Certificate of Incorporation Texas refers to the legal document used in Texas to file for incorporation with the Secretary of State of Texas. Also referred to as the Certificate of Organization, Certificate of Formation, and the Articles of Incorporation, this document essentially functions like a state license for the formation and operation of a business in the state. In Texas, forms 201 to 208 are used for filing, depending on the kind of business being formed.
Article 1: The Business's Name
There are five articles in a Texas Certificate of Incorporation, the first of which states the business’s name. This name must adhere to several naming conventions for the state of Texas, which are:
- The name cannot be the same as or deceptively similar to any existing name of a company that has filed for incorporation in Texas, no matter if they are domestic or foreign (out-of-state). The only exception is if written consent is obtained from the owner of the name for its use.
- The name must contain the terms “corporation,” “company,” “limited,” or “incorporated,” or some abbreviation of one of those terms.
- The name cannot contain terms that falsely imply an association with the government, like “F.B.I.” Other terms, like “bank” or “law offices,” will require a license.
To find out if your desired name meets these requirements, you can search for its availability in Texas through the SOSDirect system on the Secretary of State’s website. If you do not find the name, then that means it is probably available, although final approval of your name cannot be had until the Certificate of Incorporation is processed through the Secretary of State’s office.
Along with your business name, the type of business entity (for-profit, non-profit, LLC, PLLC, etc.) and business termination date (if applicable) should be included in this section.
Article 2: The Registered Agent
The second article will list the registered agent of your company and the address that they can be contacted at. A registered agent is an individual who serves and receives legal papers on behalf of your company, and every company in Texas must have a registered agent. This agent usually is a resident of Texas, but may also be a foreign or domestic entity so long as they are properly registered to conduct business in Texas and have a physical street address. A P.O. box or telephone service is not enough.
Article 3: The Directors
Who the directors of your corporation will be should be stated in the third article, along with their addresses. The directors are individuals responsible for managing the business affairs of the company, although they may delegate some responsibilities to committees or officers.
Article 4: The Shares
The fourth article requires that you state how many shares your corporation has been authorized to issue. For this, two options are available. The first is to list the shares with “par value,” meaning that the minimum dollar amount of the shares to be issued will be listed. The second option involves listing the shares as having “no par value,” meaning that the value of the shares has yet to be determined by the board of directors.
Article 5: The Purpose
Article 5 will state the purpose of the business you intend to be running. This purpose will be relative to the kind of business being run. For instance, if the business is for-profit, then its purpose is to conduct lawful business in Texas. A non-profit business or professional organization, on the other hand, would offer a statement that would give justification for it being granted a tax-deductible or tax-exempt status (in the case of non-profits) or a professional license (in the case of professional organizations).
In order to have the greatest amount of flexibility in corporate operations, in Texas one is allowed to give a very general description of their corporation’s purpose. For example, a for-profit purpose statement might read: “The purpose of this corporation is to conduct any and all lawful business that a for-profit corporation may conduct and be organized for within the parameters of the Texas Business Organization Code."
The cost of incorporation in Texas will vary depending on the profit status of the business. For-profit businesses must pay a $300 filing fee, while non-profits must only pay $25.
Additionally, one may order a certified copy of their Certificate of Incorporation for $15, plus $1 for every page; $25 for expedited service and $2 per page for fax service.
If you need help understanding Certificate of Incorporation Texas, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.