Texas Corporation

For Texas Corporation prices and State fees, please visit the costs page for forming a Corporation in Texas.

Texas corporation has a couple options for taxation. Standard "C" corporations have one major disadvantage, "double taxation". This situation is when the corporation pays corporate income tax and the shareholders pay income tax on the distribution of the profits, or dividends. In order to have the corporation to be taxed as a partnership or sole proprietorship, the corporation can elect "S corporation" tax status. This requires one additional document to be filed. The "S" election means that the corporation’s profits "pass through" to the shareholders who pay taxes individually, this way there is only one level of taxation.

All corporations and business entities filed with the Texas state office are subject to an annual filing of a statement of information, or annual report. This generally means a small filing fee is required. Texas corporation directors, officers and legal addresses are sent to the state office. corporation state offices generally allow for the filing of this report online, or you can call Companies Incorporated and have your statement filed for you, for a small service fee. This will ensure that your corporation is in good standing with the state office.

A corporation is a common form of business organization that is chartered by a state government. It is granted many legal rights as an entity separate from its owners. The corporation is distinguished by limiting the liability of its owners, issuing shares of stock that can be transferred from one individual to another, and its ability to have perpetual existence. Because a corporation is separate from its owners it can protect them from being personally liable when the company is sued (known as limited liability). In addition there are tax benefits available to incorporated businesses that are not available to unincorporated businesses.