INSTRUCTIONS FOR FILING A

CERTIFICATE OF FORMATION FOR A PROFESSIONAL ASSOCIATION

(Form 204)

 

  • Commentary: A certificate of formation is filed to create a professional association under the provisions of the Texas Business Organizations Code (BOC). A “professional association” is defined as an association, as distinguished from a partnership or a corporation, that is formed for the purpose of providing the professional service provided by: doctors of medicine, doctors of osteopathy, doctors of podiatric medicine, dentists, chiropractors, optometrists and therapeutic optometrists, veterinarians, and licensed mental health professionals, such as psychologists, licensed professional counselors, and licensed marriage and family therapists.

     

    If the entity will not be rendering one of the permitted professional services stated above, you must cancel the filing and return to the Business Organizations Menu to select another entity type.
  • Web Form and Content: The web form promulgated by the secretary of state is designed to meet minimum statutory filing requirements and no warranty is made regarding the suitability of this form for any particular purpose. This form and the information provided are not substitutes for the advice of an attorney and it is recommended that the services of an attorney be obtained before preparation of the certificate of formation.

     

    Certain statutorily required provisions have been drafted with standard pre-printed statements.  During the web filing process, you will be directed from screen to screen to provide certain variable information with which to populate the form. After entry of the information, a document image will be displayed for your review. Please review the document carefully for accuracy before submission.
  • Fee: The statutory fee of $750 must be provided before the filing is submitted (BOC § 4.156). Payments for web filings may be made by credit card or client account. Selection of the payment method is performed during the subscriber login process. Fees paid by credit card are subject to a statutorily authorized convenience fee of 2.7% of the total fees. To view the available balance in your client account, select the Account tab from the navigation bar and select "Client Account Statements" from the Account Maintenance Menu.
  • Entity Name and Type Screen: The professional association name must contain one of the following words of organization or an abbreviation thereof: Associated, Association, Professional Association, or Associates. In addition, the professional association may not adopt any name contrary to the ethics of the profession being organized. Many professions require that the name of the professional be included in the professional entity name. For specific requirements, consult the regulatory board and the rules of ethics governing the profession prior to filing the certificate of formation.

     

    After entering a name, you may wish to conduct a preliminary search of the name by clicking on the "Name Availability Search" button.
  • Name Availability Search Option: Under section 5.053 of the BOC and the administrative rules adopted by the secretary of state, if the name chosen is the same as, deceptively similar to, or similar to the name of any existing domestic or foreign filing entity, or any name reservation or registration filed with the secretary of state, the document cannot be filed. The administrative rules adopted for determining entity name availability (Texas Administrative Code, title 1, part 4, chapter 79, subchapter C) may be viewed at the secretary of state web site by clicking on the Texas Register icon.
  • Do not presume that the name searched is "available" and will be approved for filing. Even if you believe the results do not reveal the same or deceptively similar name in use, the Office of the Secretary of State must still perform its own search after receipt of the document. A final determination regarding the entity name is not made until an examiner's review and filing of the document. You are strongly urged not to make financial expenditures or regulatory filings based upon the results of your search.

     

    If you wish our office to provide a preliminary determination on the availability of the proposed name before submission, you may do so by telephone at (512) 463-5555, by dialing 7-1-1 for relay services, or by e-mail to corpinfo@sos.state.tx.us. This is only a preliminary clearance. Also note that the preclearance of a name or the issuance of a certificate under a name does not authorize the use of a name in violation of another person's rights to the name.
  • Registered Agent And Registered Office Screen: The registered agent can be either: (1) a Texas corporation or other entity such as a limited liability company, limited partnership, partnership, or other legal entity organized under the laws of this state, or a foreign corporation or other foreign entity authorized to transact business in this state; or (2) an individual resident of the state. The association cannot act as its own registered agent; do not enter the association name as the name of the registered agent.

     

    Registered Office Address Requirements: The registered office address must be located at a street address where service of process may be personally served on the entity’s registered agent during normal business hours. Although the registered office is not required to be the entity’s principal place of business in Texas, the registered office may not be solely a mailbox service or telephone answering service (BOC § 5.201). The registered office address must be an address that is generally open during normal business hours so that the registered agent may accept service of process.
  • Consent of Registered Agent Option: Effective January 1, 2010, a person designated as the registered agent of an entity must have consented, either in a written or electronic form, to serve as the registered agent of the entity. The designation or appointment of a person as the registered agent by an organizer is an affirmation by that official that the person named in the instrument has consented to serve as registered agent. (BOC § 5.2011, effective January 1, 2010)

     

    A copy of the agent’s written or electronic consent does not need to be submitted with the certificate of formation; however, the organizer is provided with the option of including a copy of the agent’s written or electronic consent as part of the certificate of formation filing.

    • The radio button on the screen is preset to an option that permits the user to continue with the filing without attaching a copy of the registered agent’s consent. When this option is marked, the certificate of formation will show selection of a pre-printed statement that indicates that the entity has retained a copy of the consent of registered agent.
    • Select the radio button “Consent Attached” to include a copy of the person’s consent to serve as the entity’s registered agent.
    • If you selected the option “Consent Attached,” the next screen will be the Consent attachment screen. The copy of the agent’s consent would be attached as an electronic file; the attachment must be in TIF, TXT, or PDF file format to be accepted.
    • If you decide not to include the consent of the registered agent and do not wish to provide an attachment, click Continue to proceed to the next screen. If you proceed to the next screen without providing an attachment, the certificate of formation will show selection of a pre-printed statement that indicates that the entity has retained a copy of the consent of registered agent.
  • Governing Persons Screen: A professional association is governed and managed by either a board of directors (option A) or an executive committee (option B). Each member of the board of directors or executive committee must be a licensed member of the association. Only professional individuals may be members, owners, and officers of the professional association. A minimum of one member is required.

     

    Select a management type and then click on “Add Member” to initiate the entry of name and address information. After entering the information, click on "Update" to return to the Governing Persons Screen to continue. You may edit or delete the director/committee member information displayed in the grid by clicking on the appropriate button.
  • Purpose Screen: The statement of purpose must be specific. Do not state that the professional association is organized for all lawful purposes for which professional associations may be formed. Please refer to the Commentary Section for further information on the specific permitted purposes for a professional association.
  • Single Purpose: Pursuant to section 2.004 of the BOC, a professional association may engage in only one type of professional service, unless the entity is expressly authorized to provide more than one type of professional service under state law regulating the professional services.
  • Joint Practice by Certain Professionals: Pursuant to section 301.012 of the BOC, the following professionals are permitted to jointly form and own a professional association to perform a professional service that falls within the scope of practice of those practitioners.

     

    • Doctors of medicine and doctors of osteopathy may jointly form and own a professional association with persons licensed as podiatrists by the Texas State Board of Podiatric Medical Examiners to perform professional services that fall within the scope of practice of those practitioners.
    • Persons licensed as physicians under Subtitle B, Title 3, Occupations Code, and persons licensed as physician assistants under Chapter 204, Occupations Code, may form and own a professional association to perform professional services that fall within the scope of practice of those practitioners.
    • Professionals, other than physicians, engaged in related mental health fields such as psychology, clinical social work, licensed professional counseling, and licensed marriage and family therapy may form a professional association that is jointly owned by those practitioners to perform professional services that fall within the scope of practice of those practitioners.
    • Doctors of medicine and doctors of osteopathy may jointly form and own a professional association with persons licensed as optometrists or therapeutic optometrists by the Texas Optometry Board to perform professional services that fall within the scope of practice of those practitioners.
    A professional listed in paragraph (1) may not jointly form and own a professional association with a professional described in paragraph (2).

    Please note that the state agencies exercising regulatory control over professions to which these joint practice provisions apply continue to exercise regulatory authority over their respective license.
  • Original Members Screen:There must be at least one member of the association. Each member must be an individual licensed to practice the type of professional service for which the association is formed. The names and addresses of each original member must be set forth. To add additional members, click on the "Add Additional Original Member" button to display an additional entry field. The persons listed as the original members of the association act as the organizers of the PA and are required to sign the certificate of formation.

     

    Physician and Physician Assistant PAs: Certain management and ownership restrictions apply to a professional association that is formed and owned jointly by a physician and physician assistant. One or more of the original members must be a physician and each physician that is an original member must sign the certificate of formation as an organizer and must ensure that a physician or physicians control and manage the professional association. A licensed physician assistant who is an original member of the association cannot act as an organizer, director, or officer of the association
  • Supplemental Provisions and Attachments Screen: Additional space has been provided for the entry of additional text to an article within this form or to provide for additional articles to contain optional provisions. You may enter the additional text in the space provided for "Supplemental Provisions/Information" or you may attach the additional provisions by following the instructions for attaching an electronic file or files as part of the submitted document. If a letter of consent for the use of a similar name has been required, then the letter of consent must be sent as an attachment to the document being submitted. Attachments must be in TIF, TXT, or PDF file format to be accepted.

     

    Reminder

    A document filed with the Secretary of State is a public record. The document, and the information provided in the document, will be available online through SOSDirect for public viewing. Do not include confidential information, such as social security numbers, within the supplemental provisions section or in an electronic attachment.

  • Duration: Pursuant to section 3.003 of the BOC, a Texas professional association exists perpetually subject to certain limitations to its duration set forth in section 302.002 of the BOC. If formation of a professional association with a stated period of duration is desired, do not use this form. Please complete form 204 found on the SOS web site index of forms page and submit by mail, fax or personal delivery.

     

  • Execution Screen: Each original member of the professional association must sign the certificate of formation. A member signs the electronic document by typing the member's name in the field provided. To add additional member signatures, click on the "Add Additional Signature" button to display another entry field. Please note that the failure of a member to sign the certificate of formation or the failure to identify the signing member as one of the original members of the association will cause the document to be rejected.

     

  • Delayed Effective Date: A certificate of formation becomes effective when filed by the secretary of state. However, pursuant to sections 4.052 and 4.053 of the BOC the effectiveness of the instrument may be delayed to a date not more than ninety (90) days from the date the instrument is signed. Please note that on the filing of a document with a delayed effective date, the computer records of the secretary of state will be changed to show the filing of the document, the date of the filing, and the future date on which the document will be effective. In addition, at the time of such filing, the status of the entity will be shown as “in existence” on the records of the secretary of state.

     

  • Document Display Screen: After completing the entry screens, the system will display an image of the document for purposes of your review. Please review the document carefully for accuracy. Please note that a person commits an offense under section 4.008 of the BOC if the person signs or directs the filing of a filing instrument the person knows is materially false with the intent that the instrument be delivered to the secretary of state for filing. The offense is a Class A misdemeanor unless the person’s intent is to harm or defraud another, in which case the offense is a state jail felony.

     

  • Edit Filing: If the document must be corrected, click on the "Edit Filing" button to return to the entry screens. Do not use the back button to return to prior screens; using the back button will not update or revise the information contained in the filing. If you wish to retain a copy of the document you are submitting, use the printer function of your browser to print the screen.

     

  • Cancel Filing: Click on the “Cancel Filing” button to terminate the electronic filing process.

     

  • Submit Filing: You must click on the "Submit Filing" button to transmit the document. You will receive a message confirming receipt of the filing that contains the session ID and the document tracking number of the document transmitted. You may wish to attach this receipt notice to your retained copy.

     

  • Franchise Taxes: Professional associations are subject to a state franchise tax. Information on state franchise tax may be obtained from the Comptroller of Public Accounts, Tax Assistance Section, Austin, Texas, 78774-0100, (512) 463-4600 or (800) 252-1381. The Corporations Section home page provides links to the IRS and Texas Comptroller web sites.