Although some formalities are required, incorporation can be an important first step in any successful business venture. One such formality, in Texas, is the drafting and filing with the Secretary of State of a "certificate of formation," also known outside the state as "articles of incorporation." Texas law requires that certain information be contained in the document, but it can also include optional provisions not specified in statute.
Certificate of Formation Overview
In Texas, corporations must file a certificate of formation with the Secretary of State in order to officially form the business. The document serves as a kind of constitution for the corporation, and provides the essential information about the business. The Texas Business Organizations Code specifies what information must be included in the certificate for it to be accepted by the state. You may include additional information in the certificate, but only if it is compliant with state law.
Texas law requires new businesses to include specific information in the certificate of formation. You must include the name of the corporation, which cannot be the same as, or similar to, any other registered business in Texas. Further, you must include the name of a registered agent, or the person you want to be responsible for accepting legal documents on behalf of the organization. Corporations must also include the purpose of the business, address of the business, and names of the organizers. Texas corporations must have at least one director, which you must list on the certificate. Corporations must also list the number and type of authorized shares the business will issue. Finally, a certificate of formation will not be complete without the signature of an incorporator.
Beyond the minimum requirements, Texas corporations are allowed to include additional provisions in the certificate of formation. State law provides that corporations exist perpetually, but you may include a provision that dissolves the business on a specified date or after a specified event occurs. You may include any other legal terms in the certificate, such as provisions that limit the compensation to the board of directors.
On the Texas Secretary of State website, you may find an example of a certificate of formation that meets the minimum legal requirements. The blank certificate allows you to fill in information about your corporation and already includes the required language about authorized shares, purpose of the organization and effective date of filing.