Navigating Texas and the Secretary of State: What You Need to Know

Texas, known for its booming economy and business-friendly environment, is one of the  most popular states for business formation in the United States. Whether you’re launching  a startup, growing a business, or considering a move to the Lone Star State, understanding  the role of the Secretary of State (SOS) in Texas is crucial. This state agency plays a  significant role in maintaining business records, processing filings, and ensuring  compliance with state regulations. 

In this blog post, we’ll explore the various services offered by the Texas Secretary of State  and what you need to know about working with this office to keep your business in good  standing. 

The Role of the Texas Secretary of State 

The Secretary of State of Texas is responsible for a wide array of tasks related to business  operations and public records. The office handles everything from registering new  business entities to managing corporate filings and compliance. Here are some of the key  functions of the Texas Secretary of State: 

1. Business Entity Formation: The SOS is the office where you’ll go to register a new  business entity in Texas. This includes forming: 
2. Corporations (C-corps and S-corps) 
3. Limited Liability Companies (LLCs) 
4. Limited Partnerships (LPs) and Limited Liability Partnerships (LLPs) d. Nonprofits and Foreign entities (businesses formed in another state but  operating in Texas) 
5. Business Filings and Records: The SOS maintains official records for all Texas  businesses. It’s the agency that processes: 
6. Articles of Incorporation 
7. LLC formation documents (Certificates of Formation) 
8. Annual reports 
9. Amendments to corporate structures (name changes, mergers, etc.) e. Statements of Information 
10. Certificates of Good Standing or Existence 
11. Regulation of Elections: The Texas Secretary of State also oversees the state’s  election processes and voter registration, although this function is separate from  business-related tasks.
12. Notary Services: The office also handles the commissioning of notaries public in  Texas, which is vital for businesses requiring legal documents to be notarized. 

Starting a Business in Texas 

If you’re planning to launch a business in Texas, the first step is registering with the  Secretary of State. Here’s a quick overview of what that process typically involves: 

1. Choose Your Business Structure: Before you file with the SOS, decide on your  business structure. Texas offers several options, including LLCs, corporations, and  partnerships, each with its own set of legal and tax implications. 
2. Name Your Business: You’ll need to choose a unique name for your business that  complies with Texas state laws. The Texas SOS website offers a name availability  search tool to ensure your desired business name isn’t already in use. 
3. File Formation Documents: To officially form your business, you’ll need to submit  the appropriate formation documents: 
4. Certificate of Formation (for LLCs or corporations) 
5. Articles of Incorporation (for corporations) 
6. Designate a Registered Agent: Texas requires businesses to have a registered  agent—an individual or entity responsible for receiving legal documents on behalf of  the business. You can serve as your own agent or hire a professional registered  agent service. 
7. Pay the Filing Fee: The filing fees vary depending on the type of business entity. For  an LLC, the fee is generally around $300, while a corporation may cost around $300 for filing. 

Ongoing Compliance and Filings 

Once your business is formed, the Texas Secretary of State continues to play an essential  role in keeping your business in compliance. Here’s what you need to know: 

1. Annual Franchise Tax and Reports: Texas requires most businesses (LLCs,  corporations, and limited partnerships) to file an annual franchise tax report and a  Public Information Report with the SOS. 
2. Franchise Tax: The franchise tax is based on the business’s gross receipts.  Businesses with less than $1.23 million in revenue may qualify for a No Tax  Due status.
3. Public Information Report: This is a report that provides basic information  about the business, including the names of officers, directors, and  

members, as well as the business’s physical address. 

2. Amendments and Changes: If your business undergoes any structural changes  (e.g., changing your business name, amending your bylaws, or changing your  registered agent), you’ll need to file an amendment with the Texas Secretary of  State. The SOS offers online tools to facilitate these filings. 
3. Certificates of Good Standing: If you need to prove that your business is legally  registered and in good standing with the state (for loans, contracts, or other  purposes), you can request a Certificate of Good Standing from the Secretary of  State’s office. This certificate confirms that your business has complied with all  state filings and obligations. 
4. Foreign Business Registration: If you are a business formed in another state but  wish to do business in Texas, you must register as a foreign entity. This involves  filing for a Certificate of Authority with the Secretary of State to legally operate  within Texas. 

How to Access Services from the Texas Secretary of State 

Many of the services provided by the Texas Secretary of State can be accessed online,  which makes it easy for business owners to stay compliant. Some key online tools include: 

• SOSDirect: This is the Texas Secretary of State’s official online portal for business  filings and information. Through SOSDirect, you can file formation documents,  request certificates, check the status of your business, and more. You can access it  at www.sos.state.tx.us. 
• Business Name Search: You can use this tool to check the availability of a  business name before filing. 
• Online Filing: The SOS allows for electronic submission of various documents,  such as amendments, annual reports, and more. 
• Franchise Tax Filing: You can file your annual franchise tax report and make  payments through the Texas Comptroller’s website, which is linked to the SOS  system. 

Why Texas is a Great Place to Do Business 

Texas is widely regarded as one of the most business-friendly states in the U.S. for several  reasons:

1. No State Income Tax: Texas does not impose a state income tax, which makes it an  attractive destination for both businesses and individuals looking to keep more of  their earnings. 
2. Business-Friendly Regulations: Texas has relatively low regulatory barriers, which  makes it easier to start and maintain a business compared to other states. 3. Economic Strength: Texas boasts a strong and diversified economy, with major  industries including energy, technology, healthcare, manufacturing, and  agriculture. 
3. Support for Entrepreneurs: The Texas Secretary of State offers a range of  resources and services to help business owners stay compliant and grow, from  online filing systems to guides on starting and managing a business. 

Conclusion 

Navigating the Texas Secretary of State’s requirements is an essential part of running a  business in the Lone Star State. From registering your entity to maintaining compliance  through annual filings and franchise taxes, the SOS plays a key role in keeping your  business legally sound. With user-friendly online tools and a business-friendly regulatory  environment, Texas remains a top choice for entrepreneurs and business owners looking  to build and grow their companies. 

By understanding the responsibilities associated with the Texas Secretary of State, you can  ensure that your business remains in good standing and continues to thrive in one of the  most dynamic economies in the nation.