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Business Formation Guide
corp formationUpdated 2026-03-30

How to Incorporate in Texas

Step 2: Appoint Your Initial Board of Directors

Texas requires you to name your initial board of directors in your Certificate of Formation. You must specify the number of directors and provide the name and address of each director who will serve until the first annual shareholder meeting. Texas allows as few as one director, and directors do not need to be Texas residents under state law.

Minimum Director Requirement

Texas permits corporations to operate with a single director. Under Tex. Bus. Org. Code § 21.405, you may structure your board with one or more directors depending on your business needs and preferences. You have complete flexibility in determining board size.

Required Information in Your Certificate of Formation

Your Certificate of Formation (Form 201) must include the number of directors on your initial board and the name and address of each initial director. This information becomes part of your public filing with the Texas Secretary of State and establishes who will manage your corporation until the first annual shareholder meeting.

Director Qualifications

Texas law does not require directors to be Texas residents, shareholders of the corporation, or U.S. citizens. You have flexibility in selecting individuals from any background to serve on your board, though you may want to consider people with relevant business expertise or industry knowledge.

Shareholders' Agreement Alternative

If you prefer not to use a traditional board of directors, you may instead manage your corporation through a shareholders' agreement. Under Tex. Bus. Org. Code § 21.720, you can designate individuals to perform board functions directly. Your Certificate of Formation must list the names and addresses of these individuals instead of traditional directors. This option is available for close corporations and provides flexibility for small, closely-held businesses.

Step 3: Prepare Your Certificate of Formation

Your Certificate of Formation is the foundational document that establishes your corporation with the State of Texas. Under Tex. Bus. Org. Code § 3.006, you must include specific information before filing with the Texas Secretary of State. This document creates your corporation's legal existence and defines its basic structure.

Required Information for Your Certificate

Your Certificate of Formation must contain six critical elements under Tex. Bus. Org. Code § 3.006. Each element directly affects your corporation's legal standing and operational structure.

Corporate Name

Your corporation's name must be distinguishable from any existing entity name on file with the Texas Secretary of State (Tex. Bus. Org. Code § 5.053). You cannot use restricted words like "Bank," "Trust," "Insurance," "University," or "College" without proper authorization (Tex. Bus. Org. Code § 5.054). Before finalizing your name, search the Secretary of State's database at https://www.sos.state.tx.us/corp/sosda/index.shtml to confirm availability. If you want to reserve a name before filing, you can do so for $40.00, valid for 120 days.

Authorized Shares

You must state the aggregate number of shares your corporation is authorized to issue (Tex. Bus. Org. Code § 3.006(a)(1)). This is your decision—you can authorize any number of shares. If you plan to issue multiple classes of shares (common and preferred, for example), you'll specify the number for each class separately under Tex. Bus. Org. Code § 3.006(b).

Par Value Designation

For each class of shares, you must designate either a par value or state that shares are "without par value" (Tex. Bus. Org. Code § 3.006(a)(2)). Par value is a nominal value assigned to shares; many modern corporations use no-par shares for flexibility. This choice affects how you account for share issuances but doesn't significantly impact most small businesses.

Initial Board of Directors

If your corporation will be managed by a board of directors, you must include the number of directors on your initial board and provide the name and address of each director who will serve until the first annual shareholder meeting (Tex. Bus. Org. Code § 3.006(a)(3)). Texas requires a minimum of one director (Tex. Bus. Org. Code § 21.405). Directors do not need to be Texas residents (Tex. Bus. Org. Code § 21.406).

Alternatively, if you elect to operate under a shareholders' agreement without a traditional board, you must name each person who will perform board functions and provide their address (Tex. Bus. Org. Code § 3.006(a)(4)).

Registered Agent Information

Your Certificate must identify your registered agent and the agent's Texas street address (Tex. Bus. Org. Code § 5.201). Your registered agent can be an individual Texas resident, a domestic corporation, or a foreign corporation authorized to do business in Texas. The Secretary of State cannot serve as your registered agent. See Step 4 for detailed registered agent requirements.

Principal Place of Business Address

Include the street address where your corporation's principal place of business will be located. This is where your corporation conducts its main operations.

Form 201: Certificate of Formation for For-Profit Corporation

Texas provides Form 201 specifically for for-profit corporations. You can obtain this form from the Texas Secretary of State website at https://www.sos.state.tx.us/corp/sosda/index.shtml. The form guides you through each required field and ensures you don't omit critical information.

Optional Provisions

You may include additional provisions in your Certificate of Formation. Under Tex. Bus. Org. Code § 3.007(d), you can add one or more social purposes beyond the standard business purpose. Alternatively, you can elect to be a public benefit corporation by including specific public benefits in your Certificate (Tex. Bus. Org. Code § 3.007(e)).

Filing Fee and Submission

The filing fee for your Certificate of Formation is $300.00 (Tex. Bus. Org. Code § 21.005). You can file online through the Texas Secretary of State's filing system at https://www.sos.state.tx.us/corp/sosda/index.shtml or submit a paper copy to:

Texas Secretary of State
P.O. Box 13697
Austin, TX 78711-3697
Phone: (512) 463-5555

Online filing is faster and provides immediate confirmation of receipt. Once filed and accepted, your corporation legally exists under Texas law.

Step 4: Designate a Registered Agent

You must appoint a registered agent as part of your Texas corporation formation. Your registered agent serves as the official point of contact for legal documents and state correspondence. Under Tex. Bus. Org. Code § 5.201, your registered agent must maintain a physical address in Texas and consent to the appointment.

Who Can Serve as Your Registered Agent

Your registered agent must be either an individual Texas resident or a domestic or foreign entity authorized to transact business in Texas. The Texas Secretary of State cannot serve as your registered agent. A member of your corporation can serve in this role if they meet residency requirements.

Physical Address Requirement

Your registered agent must have a physical street address in Texas—a P.O. Box alone is insufficient. This address becomes your official registered office and will be listed in public records maintained by the Texas Secretary of State.

Obtaining Consent

Your designated registered agent must provide written consent to serve in this capacity. You'll include this consent documentation with your Certificate of Formation (Form 201) when you file with the Texas Secretary of State.

Changing Your Registered Agent

If you need to change your registered agent after incorporation, you'll file a Statement of Change of Registered Agent/Office with the Secretary of State. The filing fee for this change is $15.00.

Filing Contact:

Step 5: File Your Certificate of Formation

You must file a Certificate of Formation with the Texas Secretary of State to officially incorporate your corporation. Texas requires Form 201 (Certificate of Formation — For-Profit Corporation) along with a $300 filing fee. You can file online, by mail, or in person.

Where to File

The Texas Secretary of State handles all corporation filings. You have three filing options: submit your Certificate of Formation online at https://www.sos.state.tx.us/corp/sosda/index.shtml, mail it to P.O. Box 13697, Austin, TX 78711-3697, or call (512) 463-5555 for additional guidance.

What to Include in Your Certificate of Formation

Your Certificate of Formation must include specific information under Tex. Bus. Org. Code § 3.006. You must state the aggregate number of shares your corporation is authorized to issue, the par value of each share (or note that shares are without par value), and the number of directors on your initial board plus their names and addresses.

If your corporation will be managed by shareholders' agreement instead of a board of directors, list the names and addresses of each person performing board functions. If you're issuing multiple classes of shares, include the designation, number, par value, and preferences for each class.

Filing Fee

The filing fee is $300.00, payable to the Texas Secretary of State. This fee is non-refundable regardless of whether your application is approved or rejected.

Processing and Approval

Once filed, the Secretary of State will review your Certificate of Formation for compliance with Texas law. Online filings typically receive faster processing than mailed documents. Upon approval, you'll receive a filed copy stamped by the Secretary of State, officially establishing your corporation's existence.

After Filing

Your corporation exists as a legal entity once the Secretary of State files your Certificate of Formation. You should obtain an Employer Identification Number (EIN) from the IRS (free) and apply for a sales tax permit from the Texas Comptroller (free) if you'll have employees or sell taxable goods or services.

Step 6: Adopt Bylaws

Bylaws are your corporation's internal operating rules. Texas law does not require you to file bylaws with the Secretary of State, but you must adopt them before or at your first shareholder meeting. Your bylaws govern how your board of directors and shareholders conduct business, including meeting procedures, voting rights, and officer duties.

What Bylaws Must Cover

Your bylaws should address the operational framework of your corporation. Under Tex. Bus. Org. Code § 21.375, bylaws typically establish procedures for shareholder and director meetings, notice requirements, quorum thresholds, and voting mechanisms. You may also specify the number of directors, their election procedures, and the duties of officers like the president, secretary, and treasurer.

Texas law permits flexibility in bylaw provisions. Your bylaws can authorize a shareholders' agreement to manage the corporation in lieu of a traditional board of directors, as referenced in Tex. Bus. Org. Code § 21.720. This option is particularly useful for close corporations where shareholders want direct control over management decisions.

Key Provisions to Include

Meeting Procedures: Define how often your board and shareholders meet (typically annually for shareholders), how meetings are called, and what constitutes proper notice. Your bylaws should establish reasonable timeframes for notice.

Quorum and Voting Requirements: Establish the minimum number of directors or shareholders needed to conduct business and specify voting thresholds for major decisions. Your bylaws can require supermajority votes (such as two-thirds approval) for significant actions like mergers or amendments to the certificate of formation.

Officer Roles: Designate the titles and responsibilities of your officers. At minimum, you should identify a president, secretary, and treasurer. Your bylaws should clarify who has authority to sign contracts, manage finances, and represent the corporation.

Dividend and Distribution Policies: If your corporation plans to distribute profits to shareholders, your bylaws should outline the process for declaring and paying dividends. This prevents disputes and ensures compliance with your capital structure.

Amendment Procedures: Include a process for amending bylaws. Typically, bylaws can be amended by either the board of directors or shareholders, depending on the provision. Specify which body has amendment authority for different sections.

Adoption and Implementation

You adopt bylaws by board resolution at your first organizational meeting or at the first shareholder meeting. The secretary should maintain a copy of the bylaws in your corporate records. Unlike your certificate of formation, bylaws do not require state filing and can be amended more easily to reflect operational changes.

If your certificate of formation establishes a close corporation structure or includes a shareholders' agreement, ensure your bylaws align with those provisions. Conflicting documents can create governance disputes.

Keep your bylaws accessible to all shareholders and directors. Maintaining clear, written bylaws protects your corporation by establishing predictable governance procedures and reducing shareholder disputes.

Step 7: Hold Your Organizational Meeting

After your Certificate of Formation is filed with the Texas Secretary of State, you must hold an organizational meeting to formally establish your corporation's governance structure. This meeting—held by your initial board of directors or shareholders—adopts bylaws, elects officers, authorizes share issuance, and approves banking resolutions. Texas law requires this step before your corporation can legally conduct business.

Timing and Participants

You should hold your organizational meeting promptly after receiving your Certificate of Formation filing confirmation. Under Tex. Bus. Org. Code Ch. 21, your initial board of directors (named in your certificate) or your shareholders conduct this meeting. If you have a single director, that director may act alone; if you have multiple directors, they typically meet together, though written consent in lieu of a meeting is permitted under Texas law.

Adopt Bylaws

Your corporation must adopt bylaws—the internal rules governing how your business operates. Bylaws address director and shareholder meetings, voting procedures, officer duties, share transfers, and other governance matters. Texas law does not prescribe specific bylaw content, so you have flexibility to tailor bylaws to your business needs. Document bylaw adoption in written minutes or a written consent resolution signed by your initial board of directors.

Elect Officers

You must elect a President, Secretary, and Treasurer at minimum. Under Tex. Bus. Org. Code § 21.401, these officers perform essential functions: the President manages day-to-day operations, the Secretary maintains corporate records and handles official notices, and the Treasurer manages finances. You may elect additional officers (Vice President, Controller, etc.) as needed. Record officer elections in your meeting minutes.

Authorize Share Issuance

Your Certificate of Formation states the aggregate number of shares your corporation is authorized to issue (Tex. Bus. Org. Code § 3.006(a)(1)). At your organizational meeting, you must authorize the actual issuance of shares to founders or initial investors. Document the number of shares issued, the consideration paid (cash, property, or services), and the names of shareholders. This creates your initial capitalization and establishes ownership percentages.

Approve Banking Resolutions

Adopt a banking resolution authorizing your corporation to open a business bank account and designate which officers can sign checks or conduct banking transactions. This resolution protects your corporation by establishing clear authorization limits and prevents unauthorized access to corporate funds. Provide a certified copy of this resolution to your bank when opening your account.

Document Everything in Minutes

Prepare written minutes of your organizational meeting that detail all actions taken: bylaws adopted, officers elected, shares authorized and issued, and banking resolutions approved. These minutes serve as official corporate records and are critical if you face legal disputes or IRS audits. Keep minutes in your corporate records book along with your Certificate of Formation, bylaws, and shareholder agreements (if any).

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