Incorporating a business in the state of Texas, and specifically Dallas, can be an overwhelming process. Incorporation involves filing the exact paperwork and making the proper financial decisions to ensure that the company is first and foremost legally compliant. However, these decisions can often be complex and need to take into account both the laws of the state of Texas as well as local Dallas regulations.

The process of forming a company begins with the formation of a business entity and continues to include matters such as business documents, filing fees, and ongoing compliance requirements. Any failure to abide by the law or make a bad decision can lead to costly legal consequences and in certain cases, lack of protection of the entity.

The five main things to consider when incorporating in Dallas, Texas, are the type of entity to be formed, ongoing legal obligations, taxes, capital requirements, and location of registered office. In this article, each consideration will be explored in detail to help entrepreneurs make informed decisions and protect their newly formed business in Dallas.

Entity type

The first step to incorporating a business in the state of Texas is to determine the type of entity that the business will form. Depending on the size and type of business, entrepreneurs may need to form either a partnership, corporation, or limited liability company (LLC). There is also the option to form an unincorporated association, called a Sole Proprietorship, which is the simplest type of entity to form with generally the least amount of regulation and paperwork.

Partnerships and Corporations are more structured entities that require more paperwork and fees to form, as well as ongoing maintenance. LLCs are a hybrid of these two entity types, and may require more paperwork and fees to form than a Sole Proprietorship, but less than a Partnership or Corporation.

Legal Obligations

Before forming an entity in Dallas, Texas, entrepreneurs must recognize the various legal obligations connected to the type of entity they are forming. For example, a Corporation must continuously abide by the regulations that it has to its officers and shareholders, while an LLC is subject to the same regulations, but may have additional duties to its members. Additionally, Partnerships, Corporations and LLCs are also subject to the uniform commercial code, which governs how companies are structured, and how and when certain decisions must be made.

For these reasons, it is important to consult a competent attorney that understands the laws and regulations of the state of Texas, as well as specific regulations in the city of Dallas. UpCounsel, an online legal services platform, features experienced attorneys that specialize in Texas state and Dallas-specific laws about business incorporation.


Depending on the type of entity that is formed, there are certain taxes that must be paid to the state of Texas. For example, LLCs are subject to the Franchise Tax, which is a flat rate based on the value of the company. Since these taxes can be subject to change, it is important to consult a competent attorney that understands Dallas tax law.

In addition, an attorney can help navigate the payroll taxes that must be paid as well as the filing requirements for the company, including profits and losses. By understanding the local Dallas regulations, entrepreneurs can ensure that they are up-to-date on any new taxes that may be passed by the city of Dallas.

Capital Requirements

Any new business in the state of Texas must also understand the capital requirements that must be met in order to form a corporation. These include procedures for filing the Articles of Incorporation and the completion of all necessary documentation. This is especially important if the company wants to issue stock to shareholders or if the company wants to accept investors.

Additionally, companies with multiple owners may also want to consider forming a management agreement, which will outline the rights and responsibilities of all the owners in the company. A competent attorney should be consulted for this matter, as it is subject to local Dallas regulations.

Location of Registered Office

Another important step that must be taken is to establish a registered office for the new business. The registered office is the location where the company will be located, as well as the official business address used for legal documents such as contracts and other filings with the state of Texas and the city of Dallas.

The registered office can be any physical address within the state of Texas and is typically a commercial address, but it can also be a residential address if desired. Additionally, while it is possible to change the registered address later if necessary, it is important that the correct address is given from the start, since mistakes can cause unintended legal consequences.