How to Start a C-Corp in Texas: A Step-by-Step Guide (2026)

How to Start a C-Corp in Texas (Quick Answer)

To start a C-corp in Texas, file a Certificate of Formation (Form 201) with the Texas Secretary of State, name a registered agent, and pay the $300 filing fee. Once the state accepts it, your corporation legally exists.

After that, you adopt bylaws, appoint directors and officers, issue stock, and get an EIN from the IRS. Texas has no corporate income tax, but that does not mean no filing: every Texas corporation still files a franchise tax report and a Public Information Report each year.

First-year cost: $300 to file (about $308 online), plus a registered-agent service if you use one, commonly $50 to $150 a year. Your first franchise tax report and Public Information Report are due May 15 of the year after you form.

Every Texas corporation still files a franchise tax report and a Public Information Report with the Comptroller by May 15, even in a year it owes $0 because revenue is under the $2,650,000 no-tax-due threshold. Skip the report and the corporation can lose its good standing despite owing nothing.

TL;DR

• No income tax is not no filing: every Texas corporation files a franchise tax report and a Public Information Report by May 15, even in a year it owes $0.
• Step 1, name: pick a unique name with a corporate designator (Inc., Incorporated, Corporation, or Corp.) and check it with the Secretary of State.
• Step 2, registered agent: name one with a physical Texas street address.
• Step 3, Certificate of Formation: file Form 201 with the Secretary of State for $300.
• Step 4, bylaws: adopt internal bylaws and keep them with your records.
• Step 5, directors and officers: appoint the board and officers and hold an organizational meeting.
• Step 6, issue stock: authorize and issue shares, keep a stock ledger, and file the 83(b) election within 30 days if your shares vest.
• Step 7, EIN: get a free EIN from the IRS, by Form SS-4 if you have no SSN or ITIN.
• Foreign owner (25% or more): file Form 5472 with Form 1120 every year, or risk a $25,000 penalty.
• Ongoing: the franchise (margin) tax report and Public Information Report by May 15; no tax is due below $2,650,000 in revenue, but you still file.

Why Form a C-Corp in Texas?

Texas draws founders with no corporate income tax, no personal income tax, and large metro markets.

• No corporate income tax at the state level, and no personal income tax either.
• Large markets in Austin, Dallas, Houston, and San Antonio.
• An online filing through the Secretary of State.

If you plan to raise venture capital, investors will most likely want a Delaware C-corp. If you will run the business in Texas and not raise venture money, forming in Texas avoids registering and paying in two states.

Step 1: Choose and Reserve Your Corporate Name

• Include a corporate designator such as "Inc.", "Incorporated", "Corporation", or "Corp."
• Search the Secretary of State's records (through SOSDirect) to confirm the name is available and different from existing entities.
• Texas lets you reserve a name for 120 days for a fee if you are not ready to file.

Step 2: Appoint a Texas Registered Agent

Every Texas corporation must name a registered agent with a physical Texas street address, available during business hours to receive legal and state documents.

• The agent can be a person or a company, but needs a real Texas address, not a PO box.
• The agent must consent to the appointment.
• A commercial agent commonly costs $50 to $150 a year.

Step 3: File Your Certificate of Formation (Form 201)

Form 201 is the filing that legally creates your corporation. You file it with the Texas Secretary of State.

• It lists the corporate name, registered agent, directors, and the number of shares the corporation is authorized to issue.
• The fee is $300, and a 2.7% convenience fee applies to online or credit-card filings, about $308 total.
• Once the state accepts it, your corporation exists and its compliance calendar begins.

Step 4: Adopt Corporate Bylaws

Bylaws are the internal rulebook for how the corporation is run. They are not filed with the state, but a corporation is expected to have them, and banks and investors often ask to see them.

• They set out how directors and officers are elected, how meetings and votes work, and how shares are handled.
• They stay with your records, not with the Secretary of State.
• Skipping them can weaken the separation between you and the corporation that liability protection depends on.

Step 5: Appoint Directors and Hold the Organizational Meeting

A corporation is run by a board of directors, who appoint the officers that handle day-to-day work. Right after formation, the incorporator or initial directors hold an organizational meeting, or sign a written consent in place of one.

• Appoint the initial board and elect officers (usually at least a president, secretary, and treasurer; one person can hold several roles).
• Adopt the bylaws and authorize the issuance of stock.
• Keep signed minutes or the written consent with your records.

Step 6: Authorize and Issue Stock

Issuing stock is how founders get their ownership, and it is easy to rush. The board authorizes shares, then the corporation issues them to the founders and any early shareholders.

• Issue shares to each founder and record what they paid (cash, property, or services).
• Keep a stock ledger, a running record of who owns how many shares.
• Deliver stock certificates or record the issuance electronically, per your bylaws.

The 83(b) election, and its 30-day deadline: if your founder shares vest over time, you generally have 30 days from the grant date to file an 83(b) election with the IRS.

It lets you be taxed on the small value at grant instead of the higher value as the stock vests. The 30-day window cannot be extended, and missing it can be expensive.

Step 7: Get an EIN, Even Without an SSN

An EIN is your corporation's federal tax ID, needed to file taxes, run payroll, and open a bank account. It is free from the IRS.

• With an SSN or ITIN, apply online and get the EIN in minutes.
• Without an SSN or ITIN, apply on Form SS-4 by phone, fax, or mail.
• The EIN is always free; you never pay the IRS for one.

Open a US Business Bank Account

Once you have the EIN, open a dedicated business bank account before money moves through the corporation.

• Keeping corporate and personal funds separate helps protect the liability shield; commingling them is a common reason courts pierce it.
• Banks usually ask for the filed Certificate of Formation, the EIN letter, and often the bylaws or a board resolution.
• A separate account also makes bookkeeping and the corporate tax return simpler.

If Your Texas C-Corp Is Foreign-Owned

A Texas C-corp that is 25% or more owned by a non-US person has an extra federal filing that many international founders miss.

• The corporation files Form 5472 with its annual Form 1120 to report transactions with the foreign owner, such as money put in or paid out for services.
• It is required every year there are reportable transactions, even with little or no profit.
• The penalty is steep: a missed or late Form 5472 starts at $25,000 per form, per year.

Handle Texas's Ongoing Compliance

Texas has no corporate income tax, so the yearly obligation is the franchise tax report and its Public Information Report.

The Franchise (Margin) Tax and Public Information Report

• The franchise tax is a margin tax administered by the Texas Comptroller, with rates of 0.375% for retail and wholesale businesses and 0.75% for others.
• No tax is due if annualized revenue is at or below $2,650,000 for 2026 and 2027, but you still file a report.
• The Public Information Report is required every year, even at $0 tax, and both are due May 15. Missing it can cost the corporation its good standing.

Federal Filings

• The corporation files Form 1120 and pays 21% federal corporate tax on profits, due the 15th day of the 4th month after year-end (April 15 for a calendar-year corporation).
• There is no Texas corporate income tax return, only the franchise tax report described above.

How Much Does It Cost to Start a C-Corp in Texas?

How Long Does It Take to Start a C-Corp in Texas?

• Online filings through SOSDirect are usually processed within a few business days.
• The EIN follows: minutes online with an SSN or ITIN, or same day to several weeks by Form SS-4 without one.
• Bylaws, the organizational meeting, and issuing stock happen right after the state approves the filing.

Common Mistakes to Avoid

• Assuming no income tax means no filing. The franchise tax report and Public Information Report are due May 15 even when you owe $0.
• Losing good standing by skipping the Public Information Report.
• Missing the 30-day 83(b) deadline on vesting founder stock.
• Overlooking Form 5472 if the corporation is 25% or more foreign-owned.
• Using a PO box for the registered agent, which Texas does not accept.

How FinStackk Helps

FinStackk is an accounting and tax compliance platform for U.S. businesses, taking you from incorporation through ongoing accounting, tax, and compliance in one place.

We handle Texas C-corp formation, from the Certificate of Formation through the EIN, through Fin-Start, including the Texas registered agent.

Once the corporation exists, Fin-Tax keeps the federal Form 1120 deadline and the Texas franchise (margin) tax on a proactive calendar. Complyy tracks the Public Information Report due May 15 and your registered-agent renewal, so you never lose good standing. Book a free demo to see them in action.

FAQ

Does a Texas C-corp pay state income tax?

No. Texas has no corporate income tax and no personal income tax. Corporations instead fall under the franchise (margin) tax administered by the Comptroller, and they file a franchise tax report and a Public Information Report each year, even when no tax is due. The federal 21% corporate tax on Form 1120 still applies.

Do I still have to file if my Texas corporation owes no franchise tax?

Yes. If your annualized revenue is at or below $2,650,000 for 2026 and 2027, you owe no franchise tax, but you must still file a Public Information Report (or Ownership Information Report) by May 15. Skipping it can cost the corporation its good standing even though no tax was due.

How much does it cost to start a C-corp in Texas?

It costs $300 to file the Certificate of Formation (Form 201), about $308 with the online convenience fee. Add a registered-agent service (about $50 to $150 a year) if you use one. Going forward, the franchise tax is $0 below the revenue threshold, but the annual reports are still required.

Is it better to form a C-corp or an LLC in Texas?

An LLC is simpler and taxed once, which suits many small businesses. A C-corp makes sense if you plan to raise venture capital, keep earnings in the business, or want multiple classes of stock. Both fall under the Texas franchise tax, but a C-corp is taxed twice at the federal level, once at the corporate level and again on dividends.

Should I form my C-corp in Texas or Delaware?

If you plan to raise venture capital, Delaware is what investors expect. If you will operate in Texas and not raise venture money, forming in Texas avoids registering and paying in two states, since a Delaware corporation doing business in Texas still has to register here and file the franchise tax report. Choose based on where you operate and whether you will raise money.

Can a non-US resident start a Texas C-corp?

Yes. Texas sets no citizenship or residency requirement to own a corporation. You will need a Texas registered agent and an EIN, which you apply for on Form SS-4 by phone, fax, or mail without an SSN. If a non-US person owns 25% or more, the corporation also files Form 5472 with its Form 1120 every year, with a $25,000 minimum penalty for missing it.