Forming a Corporation in the State of Texas

 

First of all, it is a good idea to meet and discuss your plans with your lawyer. 

 

1). You must determine the following:

   (a) First and second choice of name of corporation (must contain words "Corporation," "Company," "Incorporated," "Corp.," "Co.," or "Inc.")

   (b) The principal business of the corporation.

   (c) Location of principal office of corporation.

   (d) Location of registered office of corporation.

   (e) The number of initial directors and their names, addresses and phone numbers.

   (f) Financial matters, including initial capital requirements of the company and the initial operating capital required. 

   (g) How many shares of stock will be issued and to whom.

   (h) Will there be any restrictions on stock ownership or transfer of shares?

   (i) How soon does corporation need to be up and running?

 

2. Reserve corporate name

   (a) Check local phone books for similar names.

   (b) Check Hidalgo County Assumed Name Records.

   (c) Call Secretary of State of Texas, Corporate Division, regarding availability of proposed name:
       (i) proposed name will be rejected if it is "deceptively similar" to an existing name. 

   (d) Check to make sure proposed name is not "registered" in Texas by a foreign corporation.

   (e) Approval of a name by the Secretary of State is specifically not a ruling by the Secretary of State on whether or not a name infringes on a trade name or trademark of another corporation, including foreign corporations not doing business in Texas.

   (f) One may reserve a name for 120 days upon submitting an application and payment of the current fee to the Secretary of State.

   (g) If the proposed name is not approved, a suspense account will be set up for the filing fee and the articles of incorporation will be returned un-filed.

 

3. Determine a principal or registered office.

 

4. Determine who will act as registered agent for service of process (i.e., the person authorized to receive service of court papers if someone sues the company).

 

5. Draft articles of incorporation. Have incorporator (s) sign them (the original and one copy) and send to the Secretary of State for filing, along with filing fee.

 

6. If the corporation is a close corporation, draft shareholder's agreement regarding who can own stock and any buy-sell agreements.

 

7. If corporation is a subchapter "s" corporation, be sure to elect such status within 75 days of commencement of business.

 

8. Order "corporate outfit," including corporate seal, minute book, stock certificates and stock transfer ledgers.

 

9. Obtain signature cards from banks so authorized signatures can be obtained at initial meeting of directors.

 

10. Hold initial meeting of Directors to adopt by-laws, elect officers, issue shares, etc.

 

11. Obtain tax ID number from IRS.

 

12. Before commencing business, but after corporate existence has been approved by the Secretary of State, have corporation issue shares.

 

13. Open bank account.

 

14. Establish relationship with an insurance agent to help determine various types and amounts of insurance business will need.

 

15. Establish relationship with an accountant for bookkeeping and taxes;

 

16. Contact Advanced Payroll Service for your payroll processing needs.

 

17. Contact SBA SCORE for helpful hints from retired executives.

 

 

 

Once your corporation is established and you are doing business, your new corporation should keep the following records:

 

1. All notices and calls of regular or special meetings of the Board of Directors.
 

2. Notices of adjourned meetings of the Board of Directors.
 

3. Declarations of service of notice of meetings of the Board of Directors.
 

4. Waivers of notices of meetings of Board of Directors.
 

5. Minutes of the meetings of the Board of Directors.
 

6. Approval of minutes of Board of Directors by absent directors;
 

7. Resolutions of the Board of Directors.
 

8. Secretary's certificate of adoption of any resolutions by the Board of Directors;
 

9. The corporate seal;
 

10. List of shareholders' names and addresses;
 

11. Stock transfer book;
 

12. Financial statements and reports;
 

13. Annual reports.
 

14. Important company documents (such as contracts, leases, tax reports, insurance policies, etc.);