A business filing in Texas only takes a visit to the Secretary of State's office or its Web site.
BUSINESS WOMAN WITH BRIEFCASE image by pershing from Fotolia.com
Filing requirements for business entities and nonprofit organizations are regulated and managed under the Texas Business Organization Code (BOC), which took effect in phases beginning in 2006. On Jan. 1, 2010, a series of prior statutes covering corporations, nonprofits and other business entities were repealed. While the BOC mostly codifies previous acts into one statute, businesses can be affected by the statute's changes, including changes in language. For instance, corporations no longer file ?articles of incorporation.? Instead, all business entities are required to file a ?certificate of formation."
Simple Business Structures
Sole proprietorships and general partnerships have no state filing requirements. While partnerships generally operate with a partnership agreement, there is also no state requirement that the agreement be in writing or filed with the state. If a business under either structure will operate under an assumed name other than the surname of the proprietor or partners, than an assumed name certificate should be filed with the county clerk?s office in the county where the business premises are maintained, or, if there are no business premises, all counties where the business operates.
Corporations
A corporation, when it is formed, must file a certificate of formation with the Texas Secretary of State. Shareholders are the owners of the corporation, and managers of its business affairs are directors. Yet, Texas corporate law allows shareholders to enter into a shareholders? agreement that eliminates directors and provides for shareholder management. The filing fee for a certificate of formation is $300.
Limited Liability Companies
A limited liability company (LLC) is a hybrid business structure distinct from partnerships or corporations, yet has elements of both. The owners of an LLC, called members, can protect their personal assets from the company?s debts, as occurs in a corporation, but enjoy pass-through taxation on each member?s personal tax return, avoiding the double-tax on a corporation?s profits and on each shareholder?s dividends from profits. An LLC can choose to be managed by managers, or its members can take on a management role. The management structure, however, must be reported in the certificate of formation filed with the state. The filing fee is the same as for corporations, $300.
Limited Partnerships
The Texas BOC provides for a limited partnership with two or more persons, with one or more general partners, and one or more limited partners. A limited partner does not take an active role in the business, and is liable only for the amount of the partner?s investment. A partnership agreement is not filed with the state for public record, but the partnership must file a certificate of formation. The fee is $750.
Limited Liability Partnership
Texas was the first state to enact a limited liability partnership statute, and the provision for an LLP continues in the BOC. A general or limited partnership can register with the state as an LLP to limit the liability of general partners. For a limited partnership, the registration is in addition to its filing of its certificate of formation. An LLP?s application for registration fee is $200 per partner.
About the Author
Tom Chmielewski is a longtime journalist with experience in newspapers, magazines, books, e-books and the Internet. With his company TEC Publishing, he has published magazines and an award-winning multimedia e-book, "Celebration at the Sarayi." Chmielewski's design skills include expertise in Adobe Creative Suite's InDesign and Photoshop. He holds a Bachelor of Arts in English from Western Michigan University.
Photo Credits
- BUSINESS WOMAN WITH BRIEFCASE image by pershing from Fotolia.com
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