How to Form a Sub S Corporation in Texas
A Sub S corporation in Texas is formed in a similar fashion to the formation of a regular Texas corporation. You must file the appropriate documents with the Texas Secretary of State in order to form an S corporation in Texas. A Texas S corporation must follow certain rules, such as not exceeding 100 shareholders. In addition, a shareholder of an S corporation in Texas may not be a non-resident alien, corporation, LLC or partnership. Shareholders of an S corporation in Texas are able to pass their share of company profits and losses directly to their personal income tax return.
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Instructions
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Pick an available name for the Texas S corporation. The name you choose for the Texas S corporation must be distinguishable and unique in comparison to other business names that are registered with the Texas Secretary of State. Confirm business name availability by calling the Texas Secretary of State at 512-463-5555. The proposed name of the Texas S corporation must include a corporate designator, such as "company," "corporation," "incorporated" or "limited." You may use an abbreviation of the corporate designator in the business name.
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Appoint individuals to serve on the Texas S corporation's Board of Directors. Directors of a Texas S corporation will have duties such as governing the company and selecting officers. The state of Texas requires an S corporation to have at least one person acting as the company's director. Texas state laws don't require directors of an S corporation to reside in the state of Texas. Furthermore, there are no age requirements for an individual to act as director of an S corporation in Texas.
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Pick up the fill-in-the-blank certificate of formation from the Texas Secretary of State's office. The address is:
1019 Brazos Street
Austin, TX 78701
In other instances, you may download and print a certificate of formation from the Texas Secretary of State Web site. Call 512-463-5586 to have a Texas certificate of formation sent by mail.
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Complete the Texas certificate of formation. State the legal business name and principal address of the S corporation. List the name and address of each person or business entity responsible for organizing the Texas S corporation. Indicate the purpose for creating the Texas S corporation. Indicate the number of shares the Texas S corporation has the authority to issue to potential shareholders. State the name and physical address of an adult or registered business that will act as the S corporation's registered agent. The Texas S corporation's registered agent must agree to accept the company's legal documents and other business correspondence during normal business hours. The organizers of the Texas S corporation must sign the certificate of formation.
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File the certificate of formation with the Texas Secretary of State. Texas S corporations may file a certificate of formation electronically using the Texas Secretary of State Web site. An S corporation may file its certificate of formation by mail. Send the completed certificate of formation to:
P.O. Box 12887
Austin, TX 78711-2887
In other instances, a representative of the Texas S corporation may hand-deliver the completed certificate of formation to the Texas Secretary of State's office. As of 2010, S corporations in Texas must pay $300 to file a certificate of formation in the state of Texas.
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File Form 2553 with the Internal Revenue Service. An S corporation in Texas has 75 days after filing its certificate of formation to file Form 2553 with the IRS. You may download and print Form 2553 from the IRS Web site. All shareholders of the Texas S corporation are required to sign Form 2553 in order for the election to be official. Failure to file Form 2553 within 75 days will cause the Texas S corporation to be treated as a regular corporation until the following tax year.
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