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New page: A corporation is a legal person with the characteristics of limited liability, centralization of management, perpetual duration, and ease of transferability of ownership interests. The own...
A corporation is a legal person with the characteristics of limited liability, centralization of management, perpetual duration, and ease of transferability of ownership interests. The owners of a corporation are called “shareholders.”
The persons who manage the business and affairs of a corporation are called “directors”.<sup>1</sup> A For-Profit Corporation must register with the Texas Secretary of State.
Choosing the best management structure for your corporation, should you pursue this formation, is a decision you should make under the advisement of an attorney. Please note that what is referred to as an “S” corporation is not a matter of state corporate law, but rather a federal tax election. A for-profit corporation elects to be taxed as an “S” corporation by filing for this status with the Internal Revenue Service. Please contact the IRS and/or competent tax counsel regarding the decision to elect to file as an “S” corporation for federal tax purposes. This is not a matter that is handled by the Texas Governor’s Office.<sup>2</sup>
Corporations are subject to a state franchise tax. The filing fee for a certificate of formation for a for-profit corporation is $300.
<sub>1 However, state corporate law does provide for shareholders to enter into shareholders’ agreements to eliminate the directors and provide for shareholder management. </sub>
<sub>2 A for-profit corporation is governed by titles 1 and 2 of the Texas Business Organizations Code. Title 1, chapter 3, subchapter A, of the Texas Business Organizations Code governs the formation of a for-profit corporation and sets forth the provisions required or permitted to be contained in the certificate of formation.</sub>
The persons who manage the business and affairs of a corporation are called “directors”.<sup>1</sup> A For-Profit Corporation must register with the Texas Secretary of State.
Choosing the best management structure for your corporation, should you pursue this formation, is a decision you should make under the advisement of an attorney. Please note that what is referred to as an “S” corporation is not a matter of state corporate law, but rather a federal tax election. A for-profit corporation elects to be taxed as an “S” corporation by filing for this status with the Internal Revenue Service. Please contact the IRS and/or competent tax counsel regarding the decision to elect to file as an “S” corporation for federal tax purposes. This is not a matter that is handled by the Texas Governor’s Office.<sup>2</sup>
Corporations are subject to a state franchise tax. The filing fee for a certificate of formation for a for-profit corporation is $300.
<sub>1 However, state corporate law does provide for shareholders to enter into shareholders’ agreements to eliminate the directors and provide for shareholder management. </sub>
<sub>2 A for-profit corporation is governed by titles 1 and 2 of the Texas Business Organizations Code. Title 1, chapter 3, subchapter A, of the Texas Business Organizations Code governs the formation of a for-profit corporation and sets forth the provisions required or permitted to be contained in the certificate of formation.</sub>
