What is an Annual Report (Annual List)?

There are some states that don’t require the filing of the annual report or annual list by business entities. If you are forming an LLC or a profit corporation in Texas then instead of filing an annual report you will be required to file the “Texas Franchise Tax Public Information Report”.

What does the Texas annual report or Texas Franchise Tax Public Information Report contain? It is a document that contains specific information related to a business entity registered in the state and on which a franchise tax has been imposed. Let’s get an insight into the information it contains:

Limited Liability Company

Every domestic limited liability company registered under the laws of the state as well as every foreign limited liability company that has obtained the right to transact business within Texas state and pay franchise tax will be required to file Texas annual report also known as “Texas Franchise Tax Public Information Report” with the comptroller. The statement includes:

• The name of each limited-liability company that owns a 10 percent or greater interest in the LLC
• The file number of your limited-liability company, if you know it
• The name, title, and mailing address of each person who is a manager or officer in the LLC.
• The name and street address of a registered agent in Texas like us as designated under Texas Tax Code – TAX § 171.354, upon whom the service of process against the LLC may be served.
• To file annual list, ensure the location or registered address of the principal place of LLC business is mentioned. This should include the street, number, city, state or foreign country.

The above is governed by Texas Tax Code – TAX § 171.203

Corporation (Domestic)

Every domestic stock corporation registered under the laws of the state as well as every foreign profit corporation that has obtained the right to transact business within Texas state and pay franchise tax will be required to file the Texas annual list or “Texas Franchise Tax Public Information Report” with the comptroller. The statement includes:

• The name of each domestic or foreign business corporation that owns a 10 percent or greater interest in the corporation
• The Secretary of State file number for your corporation, if you know it
• The name, title, and mailing address of each person who is the director or chief executive officer in the corporation.
• The name and street address of a registered agent like us as designated under Texas Tax Code – TAX § 171.354, upon whom service of process against the corporation may be served
• To file annual lists, ensure the location or registered address of the principal place of business of the corporation is mentioned. This should include the street, number, city, state or foreign country.

The above is governed by Texas Tax Code – TAX § 171.203
Note: It is important to ensure that the information contained in the Texas Franchise Tax Public Information Report is true and correct to the best of the person’s knowledge.

Is there a Filing Due Date or Deadline?

As governed by Texas Tax Code – TAX § 171.203, Business Corporations and LLC’s there are specific dates for filing an annual report or Texas Franchise Tax Public Information Report on time.

Limited Liability Company

It is important to know that every domestic and foreign LLC registered in the state of Texas will be required to file the Texas Franchise Tax Public Information Report annually with the Comptroller. Let’s look at the filing deadlines or due dates to file the annual list in Texas:

The Texas Franchise Tax Public Information Report annually by May 15 in the year following the year of the registration of your Limited Liability Company in Texas.

Example: If you registered your Limited Liability Company on April 15, 2019, then your Public Information Report will be due on May 15, 2020.

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You can file an the annual list or Public Information Report with the Texas Comptroller but it takes a long time to process and this includes preparing paperwork that is information intensive and then filing it. Is there a way to file it faster and on time?

Yes, SIMPLY HIRE US and we will take care of the filing!

Corporation (Domestic)

It is important to know that every domestic and foreign corporation, professional corporations and S corporations registered in the state of Texas will be required to file the Texas Franchise Tax Public

Information Report annually with the Comptroller. Let’s look at the filing deadlines or due dates to file the annual list in Texas:

Example: If you registered your corporation on April 15, 2019, then your Public Information Report will be due on May 15, 2020.

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You can file annual list or Public Information Report with the Texas Comptroller but it takes a long time to process and this includes preparing paperwork that is information intensive and then filing it. Is there a way to file it faster and on time?

Yes, SIMPLY HIRE US and we will take care of the filing!

Is there a Late Filing Penalty of Annual Lists?

If you are unable to submit the Texas Franchise Tax Public Information Report to the Comptroller by the due date as mentioned then will there be any penalty for LLC and Business Corporations? Let’s take a look at what late submission entails:

Limited Liability Company

If a Texas Franchise Tax Public Information Report is filed late then the LLC or taxpayers will be penalized $50. This penalty will be assessed even if filing an annual report by an LLC is done on a later date or if any tax is due for the period covered after which the report is filed. The $50 penalty is in addition to other penalties that the LLC may be assessed for during the reporting period.

An additional penalty of 5% of the total tax due will be imposed on the limited liability company if they fail to file the Texas Franchise Tax Public Information Report on time. If the LLC is unable to pay the tax within 30 days from the due date then this 5% penalty will be imposed.

In the scenario, wherein, an LLC is unable to file the Texas annual report or pay its taxes even after 30 days then the delinquent tax will accrue an interest starting from 60 days after the due date.

If an LLC is unable to file the Texas Franchise Tax Public Information Report and/or does not pay tax or the penalty or interest due within 45 days from the due date, then its right to transact business in Texas may be forfeited.

Corporation (Domestic)

If a Texas Franchise Tax Public Information Report is filed late then the business corporation or taxpayers will be penalized $50. This penalty will be assessed even if filing an annual report by a business entity is done on a later date or if any tax is due for the period covered after which the report is filed. The $50 penalty is in addition to other penalties that the business corporation may be assessed during the reporting period.

An additional penalty of 5% of the total tax due will be imposed on the business or professional corporation if they fail to file the Texas Franchise Tax Public Information Report on time. If the business entity is unable to pay the tax within 30 days from the due date then this 5% penalty will be imposed.

In the scenario, wherein, a business corporation is unable to file the Texas annual report or pay its taxes even after 30 days then the delinquent tax will accrue an interest starting from 60 days after the due date.

If a business corporation is unable to file the Texas Franchise Tax Public Information Report and/or does not pay tax or the penalty or interest due within 45 days from the due date, then its right to transact business in Texas may be forfeited.

What is the cost to file Texas Annual List?

The annual filing fee is different for different types of businesses. Let’s take a look at the fee for LLC’s and Corporations:

Domestic and Foreign Limited Liability Company – $0
Domestic Business Corporations – $0
Foreign Business Corporations – $0

How to File Annual Lists with IncParadise?

The filing process of a Texas annual report or Franchise Tax Public Information Report will require extensive paperwork as you will have to provide every possible detail right from business name to principal business address, name of registered agent, partners, chief financial officer or managers, and also calculate the amount of franchise tax due.

Is there a way to make the process easier? Let IncParadise file the annual report on your behalf!

Your Benefits are:

• We will send you a due date notification and all you have to do is to order on time, so that we can ensure filing on time!
• We will ensure you receive “Reminders” regarding the due date
• We will file it directly with the Texas Comptroller
• We will help save you from late filing fees

AVOID HUGE PENALTY! AVOID FORFEITURE!

We at IncParadise, are one of the respected registered agents in Texas and will be responsible towards initiating the filing of Texas annual report for domestic and foreign professional and business corporations and limited liability companies in the state. We have access to the Texas Online System for filing Public Information Report – SOS Direct!

Business Information & Rankings

• Texas is the headquarters for 45 Fortune 500 Companies and home to 14 of the 100 Fastest Growing Businesses in America. (Fortune Small Business Magazine)
• Texas ranked 4th on the Business Climate Index. (Tax Foundation, 2004)
• If Texas were its own nation, it would represent the world’s 8th largest economy.
• Texas recently surpassed California as the largest exporter in the nation.

Cost of living

Crime Rate

Texas has the 45th lowest overall crime ranking in the U.S. (FBI, 2004)

Fees & Taxes

Business Inventory Tax
Taxed. Exemption applies if inventory is held in state less than 175 days.

Corporate Income Tax
Texas and four other States (Nevada, Wyoming, South Dakota and Washington) do not levy corporate income tax.

Personal Income Tax
Texas is one of the six States that does not levy any individual income taxes.

Personal Property Tax
Texas does not have a state property tax; however it is collected on a local/county level. All real and income-producing tangible personal property not exempt by state or federal law is taxed. Personal property (including automobiles, airplanes, boats and travel trailers) that does not produce income is mostly exempt from taxation.

Texas does not tax intangible property such as stocks, bank accounts or certificates of deposit.

State Sales and Use Tax
Base Rate: 6.25%
Machinery Rate: 6.25%

There is an exemption for industrial machinery.

Unemployment Insurance
Texas’ new employers’ rate is 2.7% for 1.5 years.

Why is Texas such a sought after destination for incorporation? In 2016, the contribution of Texas to the state’s GDP was $226 billion. According to Forbes, the ranking of this state with regards to economic climate is right at the top. That is not the only reason why there has been such an increase in new business incorporation in Texas. In fact, the business costs in Texas are far lower than that of California and Arizona.

Why Choose Texas for Incorporation?

There are several reasons why there has been a rise in company incorporation in Texas, and one of the prime reasons is the advantages that businesses enjoy. Some of the advantages include:

Franchise Tax

One of the most significant benefits you can derive from company incorporation in Texas is the exemption from franchise taxes although it is not for every business but several business enjoy this benefit. The exemption however varies according to the type of business. Profit and nonprofit corporations are exempted from the IRS under IRC Section 501(c)(2), (16) or (25).

Pass-through taxation

If you are planning to set up a company in Texas then this is another advantage you will enjoy. If you have registered your business as an S corporation, then you will only pay income tax on your income and not on the income of your business.

Protection

Texas’s Business Organizations Code (BOC) allows any individual with necessary capacity to set up a company in Texas. Such an individual can be the president, director, secretary, and shareholder of the corporation. A Texas corporation is supported by a history of provisions and case law, which provides protection to a shareholder and thus limits their personal liabilities.

Credibility

Company incorporation in Texas will help in increasing the overall “credibility” of your business. Which will further develop investor interest in your organization.

How do you incorporate in Texas?

Company incorporation in Texas has its own set of benefits. However, there’s a process that you needs to be followed. To register your C or S Corporation, there are several requirements that must be met. At incparadise.net, we have a team of specialists who can guide you towards setting up your Texas C Corporation, S Corporation, or LLC in the shortest possible time.

Here is a step by step procedure towards incorporation in Texas:

1. Type of Business: First, you need to identify the business type. You can choose from the following; a general stock corporation, non-profit corporation, sole proprietorship, limited liability company (LLC), limited partnership (LP), general partnership (GP), or limited liability partnerships (LLP).
2. Business Entity Name: The second step is to select a name for your business, along with the required suffix. The suffix will indicate the type of business entity you have formed. If you opt for a company incorporation in Texas, then it’s essential to do a business name check for the name you’ve selected and reserve it with Secretary of State. This step must be completed before filing your articles or certificate of Incorporation. You can find detailed information on checking business names here.
   Note: According to the section 5.053 of Business Organizations Code (BOC), you will not be able to choose a name that’s deceptively similar or the same as an existing business name of another entity.
3. Registered Agent: It’s required that you select a registered agent. The registered agent will be responsible for initiating the processing of your certificate of formation. As a Texas registered agent like incparadise.net, we can also receive any and all legal and business related paperwork on your behalf.
4. Articles of incorporation: You will need to file a certificate of formation with the Secretary of State. At incparadise.net, we can always file this on your behalf via the standard process or online via the expedited process.
5. Date Stamped Copies: As a part of the process of company incorporation in Texas, we will ensure that you receive date-stamped and filed copies for your records. The documents are confirmation that the state has filed and formed your corporation.

Costs and Fees associated with Texas Incorporation

What would it cost to set up a company in Texas? Check Fees here!

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The second largest economy in the US, the gross state product of Texas in 2016 was 1.616 trillion. It is also home to 6 of the top 50 Fortune 500 companies. This is one amongst many reasons why company formation in Texas is always considered as the most favorable or beneficial.

The state and local tax burdens in this state is among the lowest and is ranked 8th when it comes to providing a good business tax climate. The growing and stable economy, strong infrastructure, good labor laws, and long-term business growth perspective provides the foundation required to form a Corporation in Texas.

How do you form a Texas LLC or Corporation? Where do you start? The process for registration and formation may seem like an exhaustive one but once you have hired a top Texas registered agent like us, we will ensure, the entire process is simple and quick for you.

Let’s take a look at how to form a Texas business corporation or LLC.

Texas LLC Registration and Formation

An LLC company formation in Texas is governed by title 3 in chapter 101 of the Texas Business Organizations Code (BOC). The procedure for registration and formation of LLC is as follows:

Hire a registered agent

According to the Texas Business Organizations Code (BOC), every LLC is required to maintain a registered agent. Your registered agent can be a foreign entity or a domestic entity and they should be registered to do business in Texas. According to BOC, a limited liability company will not be able to act as its own registered agent. We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 company formations in Texas.

We are in compliance with all regulations in the State of Texas.

Choose a Name

One of the important steps towards formation of a Texas LLC is name registration. Your chosen name should end with any variant of Limited Liability Company abbreviation like XYZ LLC or XYZ L.L.C. According to section 5.053 of the BOC, the chosen name for your LLC cannot be deceptively similar or the same as any other LLC name that exists on record. In order to reserve or register your entity name, you need to download the form 507.

Certificate of Formation

If you are planning to form a Texas business LLC then the most important step is to prepare and file the Certificate of Formation for a Limited Liability Company. The Certificate of Formation (Form 205) has to be filed with the Texas Secretary of State along with the filing fee. We can file the form on your behalf as your registered agent in the state and provide you with certified copies of the LLC registration.

In case, you have any questions, feel free to call us at 702-871-8678.
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Texas Corporation Registration and Formation

If you are planning to form a Corporation in Texas then the procedure for registration and formation is as follows:

Hire a registered agent

According to the Texas Business Organizations Code (BOC), every Corporation is required to maintain a registered agent. Your registered agent can be a foreign entity or a domestic entity and they should be registered to do business in Texas. According to BOC, a Corporation will not be able to act as its own registered agent. We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 company formations in Texas.

We are in compliance with all regulations in the State of Texas.

Choose a Name

If you are planning to form a Corporation in Texas, one of the important steps towards formation is name registration. Your chosen name should end with any abbreviation like XYZ Inc or XYZ Incorporate. According to section 5.053 of the BOC, the chosen name for your corporation cannot be deceptively similar or the same as any other business name that exists on record. In order to reserve or register your entity name, you need to download an assumed name certificate or form 503.

Certificate of Formation

In order to form a Corporation in Texas, you will need to prepare and file the Certificate of Formation for a Professional Corporation (Form-203). The Certificate of Formation will be different for both non-profit (Form-202) and Profit Corporation (Form-201). It has to be filed with the Texas Secretary of State along with the filing fee. We can file the form on your behalf as your registered agent in the state and provide you with certified copies of the registration.

If you have any questions regarding Texas incorporation or LLC formation, you can simply visit the Texas Business formation page.

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Why should you register a new business in Texas? There are plenty of benefits for business owners but apart from that, this is a state that provides just the right business environment. Texas economy is literally driven by small and medium sized businesses (SME’s) thanks to the progressive business laws that pave the way for innovation to thrive.

Most companies in Texas, LLC or Corporations also leverage the advantages that the state has to offer right from limited liability to privacy, including the favorable tax climate.

Advantages that drive New Business Formations

There are several advantages that you can enjoy when we help you register a new business in Texas. Some of them include:

Advantage#1: Favorable Tax Climate

This is one of the top advantages that you can enjoy only when you register a new company in Texas. Compared to some of the other states, business tax in Texas is lower. There is ‘no” personal income tax and this provides the much required competitive advantage. Non-existent personal income tax means:

• You don’t have to pay any tax on the money you make through your startup company in Texas.
• This opens the door for businesses to recruit top talent without having to worry about losing profit.

The good news for small businesses is that the existing low business tax rate can shrink lower depending on the type of business. If the revenue of your startup company in Texas does not exceed a specified threshold then you will be able to enjoy zero business tax.

Favorable tax climate is one of the prime reasons why Texas has been the home to telecom giants.

Advantage#2: Texas Enterprise Fund (TEF)

The Texas Enterprise Fund (TEF) is the real advantage that can strengthen the roots of businesses especially in terms of providing cash grant. If you are currently pondering over the decision of registering a new company in Texas or not then this is the game changer.

Texas Enterprise Fund (TEF) is basically a financial incentive tool where a cash grant is provided for those projects that promise significant job creation as well as capital investment. TEF was implemented in 2004, and since then cash grants exceeding $600 million have been awarded across different industries.

Some of the other programs that can be beneficial for businesses include Texas Enterprise Zone Program, the Skills Development and Self-Sufficiency Fund, all of which are managed by the Texas Workforce Commission, and other local incentives as well as tax abatements.

Are there any Disadvantages of Incorporating in Texas?

If you want to register a new business in Texas, it is one of the best decisions you can make. There are several advantages and only a few disadvantages. If you choose to incorporate your business vis-à-vis form a sole proprietorship then the filing fee is quite steep at $300. Along with this, the process of incorporating your startup company in Texas will require more time as compared to other forms of businesses. Since, Corporations in Texas are monitored by the state, local, and federal agencies, there is more paperwork to be done and it has to be ensured that all documents are in compliance with state regulations.

The only thing that really matters when it comes to incorporating your business in Texas is that the advantages outweigh the disadvantages. Texas is a state that promotes long-term business growth by ensuring you don’t lose your profit in taxes!

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