Stock dividends receive fairly unfavorable tax treatment by the Internal Revenue Service, and so are often avoided in smaller corporations, especially where the owners work daily in the company's operations and so can receive bonuses in prosperous years. Special allocations of tax items are made pro rata according to the extent of stock ownership. Shareholders may deduct subject to basis limitations, and the corporate debt is not included in calculating the basis. Distributions generally are not taxable to the extent of the shareholder's basis in his stock. The liquidation of a corporation is taxable at the shareholder level via a flow-through of the corporate items.
Most states have requirements to qualify a foreign corporation to do business in their state.
If you plan to have your corporation do business outside of Texas, you need to know what those qualification provisions are and how to satisfy them. Make sure the corporation is properly formed. You must file articles of incorporation with the Secretary of State before the State of Texas can issue a charter for your corporation. After that, you must adopt bylaws, elect a board of directors, issue stock to the shareholders, and receive payment for that stock. It is also important to make sure that you capitalize your corporation adequately for its initial operations.