Texas Franchise Forms - Texas Franchise File

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Texas Franchise Forms FAQ Texas Franchise Tax No Tax Due Report

What is a franchise?

There is a definition of a franchise which has been developed by the Federal Trade Commission. Basically, a franchise involves an owner of a trademark, trade name and/or copyright giving others a license under certain conditions to use these trademarks, trade names or copyrights in providing goods or services to the public. The franchisor is the party who grants the franchise, and the franchisee is the party who receives the franchise.

What is the legal relationship between a franchisor and franchisee?

Technically, the relationship between a franchisor and franchisee is a relationship between two independent contractors. Their rights are determined by the franchise agreement. A franchise then is not a separate business entity, but is a business relationship between two separate business organizations such as a sole proprietorship, a corporation, or a partnership. The relationship between the franchisor and franchisee is controlled by the franchise contract. A corporation, sole proprietorship, or partnership may own the franchise contract or may be the entity entering into the franchise contract.

What laws govern franchises?

There are laws that restrict termination of some franchises. In some states, prior notice of termination is required. Owners of automobile dealership franchises are protected from termination of their dealerships in bad faith. This protection is provided by the Federal Automobile Dealers Franchise Act.


What are Articles of Incorporation?

Articles of Incorporation are legal documents that a company or organization must file with the state government in order to officially establish itself as a corporation. These articles outline important details about the corporation, such as its name, purpose, location, and the shares of stock it may issue. In Texas, similar to other states, the Articles of Incorporation must be submitted to the Secretary of State's Office along with a filing fee. The articles provide important information about the corporation and serve as the founding document that sets out its structure and internal regulations.


What to Include in Articles of Incorporation

When creating Articles of Incorporation in Texas, there are a few essential elements to include. Firstly, you need to specify the name of your corporation, making sure it is unique and compliant with state regulations. Next, outline the purpose of your company, describing the activities it will engage in. Additionally, you must list the initial registered office address and the name of your registered agent who will receive important legal documents on behalf of your corporation. It is also important to mention the total number of shares your corporation is authorized to issue and any specific classes or series of shares. Finally, make sure to include the names and addresses of your initial directors. By including these crucial details in your Articles of Incorporation, you can establish a strong foundation for your corporation in Texas.


1. Full Name of Corporation

Texas Industries, Inc. is the full name of the corporation based in the state of Texas. They are a company that operates within the borders of Texas and is engaged in various business activities. The corporation is legally recognized in Texas and operates under the laws and regulations of the state. Texas Industries, Inc. conducts its operations by adhering to the required legal obligations and fulfilling its responsibilities as a corporate entity in Texas.


2. Principal Place of Business

The principal place of business refers to the main location or headquarters of a company. In Texas, it means the primary office or facility where most of the company's operations and decision-making processes take place. It's like the company's main hub or home base where employees, managers, and executives usually work and make important business decisions. The principal place of business is significant because it provides a central location for employees to collaborate, coordinate, and carry out tasks efficiently. In Texas, having a strong principal place of business can contribute to the success and growth of a company in the state.


12. Limitation of Director’s Liability

The limitation of director's liability in Texas refers to the protection provided to directors of a company against personal financial responsibility for the actions or decisions they make in their role as directors. This means that directors are not personally liable for any debts, obligations, or legal claims that the company may face, as long as they have acted in good faith, within the scope of their authority, and in a manner that they reasonably believe is in the best interest of the company. This limitation helps encourage individuals to take on director roles by reducing the fear of personal financial loss.