A corporation is the right vehicle for an El Paso business that expects to bring in investors, issue shares to key employees, hold a professional license as a professional corporation, or eventually sell to a larger company. Physicians and dentists near Sierra Providence, engineering firms bidding on Fort Bliss contracts, and founders planning to raise capital all tend to incorporate rather than form an LLC. A corporation also lets owner-employees pay themselves a salary and take remaining profits as distributions under an S-corporation election, which can reduce self-employment tax. The trade-off is formality: directors, officers, annual meetings and minutes are not optional.
Texas for-profit corporations are governed by Chapter 21 of the Texas Business Organizations Code. The corporation is created by filing a Certificate of Formation, Form 201, with the Texas Secretary of State, stating the corporate name, the number and par value of authorized shares, the initial directors and the registered agent required by Section 5.201. The filing fee is $300. Professional corporations for licensed professionals follow Chapter 301 and use Form 203. After formation, the corporation adopts bylaws, holds an organizational meeting, issues stock and obtains an EIN. To be taxed as an S-corporation, Form 2553 must reach the IRS within two months and fifteen days of the start of the tax year.
The Law Office of Robert Navar incorporates El Paso companies on a flat fee that includes the Form 201 filing, bylaws tailored to the number of shareholders, the organizational consent of directors, stock certificates and ledger, the EIN and, when appropriate, the S-corporation election. Nothing about incorporating involves a court; every document is filed with the Secretary of State or the IRS or signed privately. Founders who file the certificate alone and skip the bylaws and stock issuance end up with a corporation that has no shareholders on paper, which becomes a real problem the first time a bank, investor or buyer asks who owns it. We finish the job so the corporate record is complete from day one.
C-corporation, S-corporation or professional corporation?
Every Texas corporation starts as a C-corporation for federal tax purposes, paying tax at the entity level with shareholders taxed again on dividends. Most small El Paso corporations elect S status to avoid that double tax, but an S-corporation can have no more than 100 shareholders, all of whom must be U.S. citizens or residents, with a single class of stock. That rule matters on the border: a corporation with a shareholder living in Juárez who is not a U.S. resident cannot be an S-corporation. Licensed professionals — doctors, dentists, architects, CPAs — must form a professional corporation or PLLC instead of a general corporation.
Keeping the corporation alive: annual duties in Texas
A Texas corporation must file a franchise tax report and Public Information Report with the Comptroller by May 15 each year, hold an annual shareholders' meeting and a directors' meeting (or sign written consents in their place), keep minutes, and maintain a current registered agent with the Secretary of State. Missing the franchise tax filing leads to forfeiture of the corporation's right to do business in Texas, and directors can become personally liable for debts incurred after forfeiture. We provide a compliance calendar with every formation and can serve as registered agent so state notices never go unanswered.
What's included
- Corporate name check with the Texas Secretary of State and preliminary trademark screen
- Certificate of Formation (Form 201, or Form 203 for a professional corporation) filed through SOSDirect
- Bylaws customized to your shareholders, directors and officers
- Organizational consent of directors and initial shareholder resolutions
- Stock certificates, stock ledger and subscription agreements
- Federal EIN and, when appropriate, IRS Form 2553 S-corporation election
- Texas Comptroller franchise tax setup and annual compliance calendar
How it works
Structure meeting
We identify the shareholders, directors and officers, decide on authorized shares and par value, and determine whether a C-corp, S-corp or professional corporation fits your El Paso business and your tax situation.
State filing and EIN
We file Form 201 with the Texas Secretary of State through SOSDirect, designate the registered agent and obtain the EIN from the IRS once the certificate is accepted, typically within a few business days.
Organization and stock issuance
Directors sign the organizational consent adopting bylaws and electing officers, shares are issued and recorded in the ledger, and we file the S-corp election if chosen. You receive the complete corporate book.