How to Incorporate a Small Business

by Carter McBride
Corporations allow business owners limited liability.

Corporations allow business owners limited liability.

billion dollar corporation image by Augustus Saxton from

Incorporation allows for some protections of owners of a business. States control incorporation laws and regulations. Generally, a business can incorporate in any state. Texas provides a form for incorporation. The business files the form with the Texas Secretary of State. Due to the complex nature of the incorporation, the Texas Secretary of State recommends using an attorney or tax specialist. Using the form does not replace expert advice because each incorporation has different variables.


Enter the name of the corporation under Article 1. The name cannot be similar or deceptively similar to other current corporations. The name must also include the designation of the corporation, such as incorporation or limited.


Enter the name of the registered agent or registered office under Article 2. He can be a business or a person. The business must also write the address of the registered agent or registered office. If choosing a business or entity to perform as the registered agent, the business or entity must be registered to conduct business in Texas. The business being incorporated cannot act as its own registered agent. In addition, if a person acts as the registered agent, that person must sign a written consent form to act as the registered agent.


Disclose the director's names and addresses under Article 3. Texas requires at least one director.


Determine the total number of authorized shares the company may issue and enter the amount on Article 4. Then check box A if the shares will have a par value or check box B is the shares will have no par value. These options are at the discretion of the incorporating business. The number of shares will determine the percent of ownership each shareholder has per share.


Write the purpose of the corporation and attach the document as Article 5. The purpose of the corporation should be narrowly construed to keep the corporation focused. Any deviation from the purpose of the corporation could then lead to legal liability.


Enter any supplemental information and attach additional documents as necessary. Additional information are additional clauses the corporation wants in the articles of incorporation. These includes items that include the length of the corporation if the owners do not want the corporation to exist perpetually. These additional articles are optional for each corporation so the corporation has some leeway in determining how it wants to be controlled.


Write the name and address of the organizer of the corporation on Page 6. The organizer must be 18 years old or older, and a corporation or other legal entity.


Check the box for when the filing's effectiveness takes place. The incorporation is (A) effective when filed, (B) effective not more than 90 days from filing or (C) the effective date is after another specified event.


Sign and date the form by the organizer.


Pay the $300 filing fee and then send the form by mail to P.O. Box 13697, Austin, Texas 78711-3697, fax to (512) 463-5709; or delivery to the James Earl Rudder Office Building, 1019 Brazos, Austin, Texas 78701.


  • Before incorporating, a small business should seek legal advice to account for different variables of each company.

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