1. How do I form a "C" corporation, an "S" corporation or a "501(c)(3)" corporation?

The Texas Business Corporation Act and the Texas Non-Profit Corporation Act do not distinguish between corporations using these designations. When articles of incorporation are filed with the secretary of state pursuant to one of those statutes, either a business corporation or a non-profit corporation is created. Designations such as S, C, or 501(c)(3), relate only to federal tax provisions. If you need information regarding those provisions or how they might affect the filing of articles of incorporation you should contact your own tax counsel or the Internal Revenue Service.

2. How do I form a minority-owned business?

Formation of a minority-owned business is not addressed by the Texas Business Corporation Act and therefore, this information is not available from the secretary of state. Information regarding certification as a historically underutilized business (HUB) may be obtained by calling the Texas General Services Commission at (512) 463-3419. The Small Business Program and the Business Information and Referral Office in the Texas Department of Commerce, (512) 936-0223 or (800) 888-0511, may also be of assistance.

3. Do you have to be a U.S. citizen or a U.S. resident to incorporate and/or own a corporation in Texas?

No. The Texas Business Corporation Act and the Texas Non-Profit Corporation Act do not place any restrictions on who can incorporate or own shares in a corporation except that the incorporator must be at least 18 years old. A corporation may provide residency or citizenship limitations in its articles of incorporation or bylaws. You should consult tax counsel or the Internal Revenue Service to determine any ownership or other restrictions that apply to S corporations.

4. Can a person under 18 years old be a director, officer or shareholder of a corporation?

Yes. Neither the Texas Business Corporation Act nor the Texas Non-Profit Corporation Act place any restrictions on who can own shares in or manage a corporation. Such restrictions may be set forth in the corporation's bylaws. The capacity of a minor to own property and/or sign a contract would be considerations in whether a corporation should have a minor as an officer or director.

5. What is a registered agent? What are the agent's duties? Where may a registered office be located? Can the secretary of state be designated as the registered agent of a corporation, limited liability company or limited partnership?

A registered agent is a natural person or an entity which is authorized to transact business in Texas that is responsible for receiving service of process or official notices addressed to the entity. The registered agent generally has a contractual obligation to forward any such process or notice to the entity. The secretary of state may not be appointed to be the registered agent of a corporation, limited liability company, or limited partnership.

The registered office must be a physical address where the registered agent may be located during business hours. It cannot be a post office box or a lock box that is part of a commercial mail/message service unless that commercial enterprise is designated to be the registered agent. However, the registered office may be a post office box if the population of the city in which the registered office is located is less than 5,000.

6. Does a corporation have to issue stock? What is par value? How do you determine the par value of the corporation's stock? Is there a minimum or maximum value for corporate stock?

A business corporation must sell shares of stock in order to capitalize the corporation, that is, provide the corporation with its own capital, separate from the money of its owners. This separation provides part of the support for shielding the shareholders from personal liability for the debts and obligations of the corporation.

Shares of stock sold by the corporation represent proportionate ownership interests held by shareholders in the corporation. "Par value" is a dollar value assigned to shares of stock which is the minimum amount for which each share may be sold. There is no minimum or maximum value that must be assigned. Shares may also have "no par value," which means that the Board of Directors will assign a value to the stock below which the shares cannot be issued.

There is no minimum number of shares that must be authorized in the articles of incorporation. One or more shares may be authorized. However, the corporation may not sell more shares than it is authorized to issue and it must receive consideration of a value of not less than one thousand dollars ($1,000.00) for its shares prior to beginning business.

7. Where does the corporation obtain its corporate seal, stock certificates and books for its minutes and other records?

The Texas Business Corporation Act does not require that a corporation have a corporate seal, therefore the secretary of state does not have information or regulations on how to design a seal or where to obtain one. Seals, stock certificates and corporate minute books generally may be purchased from legal materials suppliers or corporate service companies.

8. Can I file the corporation's bylaws with the secretary of state?

No. The bylaws of a corporation are documents kept by the corporation at its principal office. There is no statute that permits the filing of bylaws with the secretary of state and the secretary of state will not accept them for filing.

9. Can I register a trade name?

There is no statute in Texas that permits the registration of the name of a business, that is, its trade name or commercial name, whether that business is incorporated or unincorporated.

Individuals and unincorporated entities that regularly conduct business using an assumed name (often referred to as a "dba") must file an assumed name certificate with the county clerk in each county in which business premises are maintained. If corporations, limited liability companies or limited partnerships (entities created by filing with the secretary of state) do business with a name that is different than the name set forth in the organizational documents, they must file assumed name certificates in the county or counties where the registered office and the principal office are located, and must also file with the secretary of state.

10. If I file articles of incorporation, will incorporating keep others from using my company's name?

Incorporating will not keep another business from using your name. Generally, every business must protect its own business name and the good will that it has acquired from the sale of its goods or services in a specific geographic area. Filing articles of incorporation only prevents the secretary of state from filing a document to create another corporation, limited liability company or limited partnership that has the same, a deceptively similar, or similar name as the entity already in existence.

11. How can I protect a trade name nationwide?

There is no national registration of trade names. Generally, businesses, including corporations, protect their trade names by registering their trade name as a service mark or trademark if the trade name also functions as a service mark or trademark. The secretary of state recommends that businesses obtain private counsel to get advice on how to protect a trade name in interstate commerce.

12. Can the same person be the shareholder, director and officers of a corporation?

The Texas Business Corporation Act requires that there be at least one director in a corporation and two officers. The required officers are a President and a Secretary. One natural person may hold both offices and be the sole director. That one person may also be the sole shareholder. A corporation may not be a director of another corporation.

In the case of a non-profit corporation, the Texas Non-Profit Corporation Act requires that there be at least three directors in a non-profit corporation. The required officers of a non-profit corporation are a President and a Secretary; however, the same person cannot hold the offices of President and Secretary. Only an individual may serve as a director of a corporation.

13. Do I need to publish a notice before incorporating a business?

The Texas Miscellaneous Corporation Laws Act requires only that an existing unincorporated business which intends to incorporate without a change in its name publish its intent to incorporate in the local newspaper for four consecutive weeks.

14. What are the differences between a corporation, a limited liability company (LLC), and a registered limited liability partnership (RLLP)? What are the benefits of forming a corporation?

Corporations are formed pursuant to the Texas Business Corporation Act or the Texas Non-Profit Corporation Act. Corporations have shareholders, are managed by a board of directors, and the daily affairs are administered by officers. Similarly, a limited liability company has members and may be managed by one or more managers. Both entities must pay Texas franchise tax, but may have different federal tax liabilities. Generally, persons form corporations or limited liability companies in order to shield the shareholders or members and officers or managers from personal liability for the debts and obligations of the entity. There may also be various tax advantages to forming these entities which may not be available for sole proprietorships and general partnerships.

A registered limited liability partnership, also called an L.L.P., is either a general or limited partnership that registers annually with the secretary of state and carries a minimum of one hundred thousand dollars ($100,000) in errors & omissions insurance. Once registered, the general partners have a liability shield under various circumstances for the wrongdoing or malpractice of other general partners, as well as for the general obligations of the partnership incurred while the partnership is a registered limited liability partnership.

The secretary of state does not provide specific information as to whether a person should incorporate or form a limited liability company or a partnership. Persons contemplating forming any of these entities should consult with private counsel regarding their individual fact situation.

15. What is a close corporation? What are the benefits of forming a close corporation?

A close corporation is any domestic corporation that has in its articles of incorporation a provision stating that "this corporation is a close corporation." A corporation may be formed initially as a close corporation or may amend its charter to include this statement. A close corporation may be managed according to a shareholders' agreement instead of by a board of directors. In addition, bylaws are not required if provisions normally included in bylaws are included in the shareholders' agreement. Frequently, shareholders in close corporations agree to limit the conditions under which shares may be transferred or sold, to apportion profits and losses in a specific manner, and/or to set terms and conditions for share ownership or management positions. Persons interested in close corporations should consult Part Twelve of the Texas Business Corporation Act. Both professional corporations and professional associations may utilize the provisions of Part Twelve of the Texas Business Corporation Act in their formation documents.

16. What is a non-profit corporation?

A non-profit corporation is created by filing articles of incorporation with the secretary of state in accordance with the Texas Non-Profit Corporation Act ("TNPCA"), articles 1396-3.02 amd 1396-3.03. "Non-profit corporation" means a corporation no part of the income of which is distributable to members, directors, or officers [TNPCA, article 1396-1.02A(3)]. A non-profit corporation may be created for any lawful purposes, which purposes must be fully stated in the articles of incorporation. Not all non-profit corporations are entitled to exemption from state or federal taxes.

17. Is a non-profit corporation exempt from taxes?

Exemption from federal and state taxation is not automatic and eligible corporations must apply with the Internal Revenue Service ("IRS") and the State Comptroller to obtain an exemption. Not all non-profit corporations are entitled to exemption from state and federal taxes. The secretary of state, however, does not make the determination of exemption.

Exemption from federal taxes is determined by the IRS. You should consult the IRS prior to filing the articles of incorporation to determine what provisions should be included in the articles for the corporation to be exempt from federal taxes. IRS Publication 557 titled "How to Apply for Recognition of Exemption for an Organization," describes the rules and procedures for non-profit organizations requesting exemption. The publication can be obtained from either the IRS or the Government Printing Office. Questions about exempt status can be directed to:

IRS

Exempt Organizations
1100 Commerce
Dallas, Texas 75242
(214) 767-6023 [Customer Service]
(214) 767-0040

A non-profit corporation may be exempt from the payment of state franchise taxes if its purposes fall within one of the exemptions listed in the Texas Tax Code, Chapter 171, Subchapter B. Questions on exemption procedures should be addressed to:

Comptroller of Public Accounts
Tax Assistance
Exempt Organizations Section
Austin, Texas 78774-0100
(512) 463-4600
(800) 252-1381
TDD: (800) 248-4099 or (512) 463-4621

18. Can a non-profit corporation pay a salary to its officers, directors and/or employees?

Yes. Any corporation may pay reasonable compensation for services rendered to the corporation.

19. Can a non-profit corporation give political contributions?

Generally, political and social action activities are permissible purposes for a non-profit corporation as long as the purpose is set forth in the articles of incorporation. Specific questions regarding contributions should be directed to the Texas Ethics Commission, (512) 463-5800, the Federal Elections Commission or the Internal Revenue Service.

20. How much franchise tax must a corporation or limited liability company pay?

The Office of the Comptroller of Public Accounts administers the Texas Tax Code which includes franchise tax provisions. Any questions on tax issues should be addressed to that agency, (800) 252-5555 or (800) 252-1381.

21. May chiropractors form professional associations?

Chiropractors may form professional corporations and therefore are excluded from the provisions of the Texas Professional Association Act pursuant to Section 3 of the Act. Chiropractors may form professional corporation pursuant to article 1528f of the Texas Civil Statutes, a professional limited liability company pursuant to Part Eleven of article 1528n of the Texas Civil Statutes, or register as a limited liability partnership pursuant to Section 3.08(b) of the Revised Partnership Act.

22. Can a corporate general partner of a limited partnership have the same name as the limited partnership, except for the evidence of incorporation, i.e., Co., Corp. or Inc.?

Governing statutes and administrative rules provide that entities created by filings with the secretary of state may not have names that are the same or deceptively similar. Further, the part of the name which indicates a limitation on liability, such as the words "Corporation," "Inc.," "Ltd.," or "L.L.C." may not be used to distinguish entities. Therefore, notwithstanding the use of different endings, a general partner which is a corporation may not have the same name as or a name that is deceptively similar to the limited partnership. The entities however may have similar names as long as the entity being created submits a letter of consent with its formation documents from the entity in existence giving permission to use the similar name.

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Lower Back Pain and Neck Pain, caused by many different problems and conditions, can range from a mild, bothersome, dull pain to very severe, incapacitating, unrelenting pain that interferes with normal movement, restricting mobility.  There are several causes of back and neck pain such as referred pain, which is feeling pain in your back and neck caused by other organs in the body not located near your back or neck, such as the kidneys or gall bladder.  In young adults and children, the most usual causes of back and neck pain are strains and sprains of the neck or back.  Strains are muscle injuries to the neck or spine and sprains are ligament injuries.  Strain and sprain symptoms usually develop immediately or within a day and disappear within a moderate length of time, usually a month or so.  The symptoms of back and neck pain caused by sprains or strains include pain from tearing or stretching of the soft tissue, stiffness, or neck spasms.  

Even with todays advanced technology, in many cases the exact cause of back and neck pain are unknown.  Many times back and neck pain is just a symptom caused by many different problems such as degeneration of vertebrae.  The effect of aging or stress on the ligaments and muscles that support the spine can often caused this.  Other reasons for back and neck pain include fractures, injury, or trauma; poor muscle tone; overuse or strenuous activity; abnormal growths such as bone spurs or a tumor; arthritis; congenital abnormalities of the bones and vertebrae; compression fractures; and muscle or ligament tears.  

There are several ways to help prevent some types of back and neck pain.  These include maintaining a healthy weight, use proper lifting techniques such as bending from the knees; if possible, reduce emotional stress in your daily life; practice proper posture techniques when sleeping, standing, sitting, walking, or using computers or other equipment; and participate in regular stretching and exercise programs.

Back and neck pain caused by a strain or sprain often involves a rest of no more than three days and icing the injury, combined with a pain medicine and anti-inflammatory medication to help relieve the spasms.  Slowly work you way back to normal exercise and activities because starting to move again is an important part of recovery.  Doing strengthening and stretching exercises for your abdominal, leg, neck and back muscles and learning about proper posture, lifting, and relaxing techniques helps prevent future back and neck pain.  If your back and neck pain becomes more severe or does not seem to be subsiding, seek medical advice.

For more information, visit BackPainFixes.com

The erector spinae are back muscles that run along each side of the spinal column.  When you injure this muscle, it can really hurt.  The best way to control the pain is through exercises that target these muscles.  Too many people forget all about toning up their back muscles when they exercise.  They work their arms, legs and abdomens but leave the poor back out of the picture.

The best exercises I’ve found for the back include the barbell bent row, the deadlift, the pelvic lift, the leg lift buttock tightener and the double leg lifts.   Though some of these exercises sound like they’re meant for bodybuilders or weightlifters, they are perfect for everyone.  You don’t have to use a heavy weight.  In fact, you can use a phone book if you want.  The main point is you need to make sure you include your back in a regular exercise routine if you want to avoid unnecessary sprains, pulls and tears.

Learn more about back treatments and back exercises at Back and Neck Pain.

Choosing a Personal Injury Attorney

Personal injury cases are serious matters. They often involve grave injury, permanent disability, and even death. Victims depend on the financial damages they are awarded to cover their medical treatments, replace permanently lost income, and compensate for their pain and suffering. Without a qualified, experienced personal injury attorney, their chances of receiving fair compensation plummet.

That's why it is imperative that, if you have been a victim of personal injury, you choose the right personal injury attorney to represent you. Here are a few things to consider when making your selection:

Choose an attorney who specializes in personal injury

You wouldn't see a podiatrist if you had a heart problem, so why would you hire a lawyer who doesn't specialize in personal injury? Your lawyer should be able to accurately assess the merits of a personal injury case, approximate its monetary value, and determine the best strategy for pursuing it. He or she should also have extensive experience in the field, including personal injury jury trial experience. Further, because landmark cases can change the legal landscape, your lawyer should be one who keeps current with the latest developments in personal injury law - these may be used to your advantage.

Choose a personal injury attorney experienced in dealing with insurance companies

Insurance company lawyers represent most personal injury case defendants. These corporate lawyers seek to pay out the least amount possible and will try to delay, delay, delay, so an inexperienced personal injury attorney may be at a disadvantage in these negotiations. Therefore, choosing a personal injury lawyer with a proven track record of successful negotiations is essential.  Don't be afraid to ask what the average case size the lawyer takes on settles for, how many trials they have each year, what percentage of their clients do they file suit on, and what percent of the ones they file suit on go all the way to trial.

Choose an attorney with trial experience

Although most personal injury claims are settled out of court, personally injury lawyers sometimes obtain favorable settlements by threatening to take cases to trial. The defendants are often willing to pay out more money to the plaintiffs to avoid expensive trials, negative publicity, and the chance that a court would award the plaintiffs more money. In this case, experience is key: if your personal injury attorney has never won cases in court, the defendant in your lawsuit may not take the threat of going to trial seriously.  When you go up against an insurance company, both you and your attorney need to have the attitude the case is going to trial.

Choose an attorney who respects you as a client

Remember that when you hire a personal injury attorney, you are paying him for a service - and you should be satisfied with the quality of that service. He or she should return your phone calls promptly, communicate with you personally, and keep you updated on the status of your case. He or she should also discuss the terms of your contract, including fees, up front (Most personal injury attorneys work for a contingency fee, meaning that they are paid out of your settlement. If you don't win, you don't pay.). If your attorney's performance is less than stellar, realize that you can still replace him or her at your own discretion.

Obtain legal advice from a personal injury lawyer in your area.  If you live in Texas, you can request our Free Texas Accident Victim's Guide which goes into much more detail about how to choose the right personal injury attorney and mistakes to avoid with your personal injury case.

I have posted a great video created by injuryboard.com on my Texas Law Blog which covers the myths of tort reform - check it out and let me know what you think!


Andrew Traub - Helping accident victims protect their legal rights.
Free information available on many legal topics.

If your business has past due accounts, you better not sit on them.  Many of the small business owners come to me for debt collection help when it's already too late.  Often we find out the company that owes them the money has shut down or been sold to another company.  Both present problems.

In the case of a company that has shut down, we need to file suit, obtain a judgment, and then see if the assets were improperly distributed - all of which takes more time and effort (and hence money).

If the business has been sold, we need to see if it was an asset sale or a takeover.  If it was an asset sale, the business could be out of luck as Texas law protects purchasers in good faith (businesses and people that buy without notice of another person's interest).

If you hire us for your accounts receivable collection  needs, we can start with a collection letter giving the debtor a short time to respond.  Then we file suit in an attempt to obtain a judgment on your behalf.  Once the judgment is obtained, we still need to find the assets and convert them to cash.  The longer you wait, the harder this all becomes.

Don't wait until it's too late and you have to write-off the debt.  Contact our Austin law office today.

If you have a corporation or limited liability company outside of Texas that is doing business in Texas, the law requires you to have a registered agent in the state to accept service of lawsuits.

A registered agend is required for each entity, that is, each corporation and LLC

Failing to register and designate a registered agent may foreclose or hinder the company's ability to legally enter into contracts and gain access to the Texas state courts. Moreover, it may subject the company to monetary, civil, and possibly criminal sanctions.

While there are many companies that can act as a registered agent, you may want to use a lawyer in Texas for your registered agent.  Why?  Because a lawyer can do more.  The time you'll really care who your registered agent is will be when you are on the defensive side of a lawsuit.  Then you'll have to find a lawyer to defend you and give him or her a copy of the suit before the deadline to respond expires.  You'll be under the gun.

Instead, you may want to consider using an attorney.  Make sure the attorney has litigation experience and review the contract outlining what is and what is not covered in the registered agent agreement.

Good luck,

Andrew

The Texas Supreme Court recently overturned a Corpus Christi mechanic's $169,000 damage award because he failed to quantify how much asbestos had been inhaled on the job.

As a mechanic for more than 30 years, Arturo Flores was exposed to asbestos every time he ground brake pads (the pads contained anywhere from 7 to 28 percent asbestos).  Ultimately, he developed asbestosis, an incurable and debilitating lung condition.

On appeal, Borg-Warner, who lost at trial, claimed that Mr. Flores could not quantify how much asbestos he had inhaled and how much were from their brakes.  The court reasoned that Mr. Flores did not show how much asbestos could have been inhaled or whether the amounts were sufficient to cause asbestosis.

Since the testing required to prove this new, higher standard is expensive, victims will now have a much harder time winning in court.

Andrew Traub Austin's Accident Lawyer - Helping accident victims protect their legal rights. Free information available.

If you are looking for a lawyer or attorney in Austin, Texas, there's a new directory designed just for that.

The Austin Lawyer Directory hopes to help consumers and businesses easily locate a lawyer to help them with their problem.  Instead of using legal terms, its directory focuses on problems and solutions.  More additions and features are promised.

It's just starting out, so check it out and send them feedback about what you like and don't like.

Cheers,

Andrew Traub
Austin Accident Lawyer - Helping accident victims protect their legal rights. Free information available.