Form 506 – Notice of Transfer of Reservation of an Entity Name

Jurisdiction: Country: United States | Province or State: Texas

What is a Form 506 – Notice of Transfer of Reservation of an Entity Name?

Form 506 is the Texas Secretary of State filing used to reassign an active entity name reservation from the current holder (transferor) to a new holder (transferee). Once filed and accepted, the transferee becomes the official reservation holder for whatever time remains on the original reservation. In Texas, an initial name reservation typically lasts 120 days. A transfer does not restart or extend that clock; it only changes who controls the reservation during the remaining term.

The form is useful when the person or firm that initially reserved a name—often to secure it quickly—differs from the party that will file the formation or foreign registration. Founders, investors, law firms, registered agents, consultants, and holding companies commonly reserve names early while strategy and approvals are finalized. As plans evolve, the entity or individual actually responsible for filing may need to hold the reservation to avoid confusion or delays. Form 506 makes this handoff clear in the public record.

Typical Usage Scenarios

• A founder who reserved a name personally transfers it to a new holding company created to own the brand and IP.
• A law firm or filing service that reserved a name for a client transfers it back to the client or a designated officer when the client is ready to file.
• A holding company transfers a reserved name to the soon-to-be-formed subsidiary that will operate under that name.
• In a transaction, the seller transfers the name reservation to the buyer at closing so the buyer can immediately file formation documents.

A name reservation—and therefore its transfer—has a narrow purpose: it prevents others from forming or registering under that exact name in Texas during the reservation period. It does not create an entity, grant authority to do business, or confer trademark rights. It is simply a temporary priority to use the reserved name on Texas business filings. By transferring the reservation, you preserve that limited right and align it with the party that will take the next filing step.

Even when the transferor and transferee are affiliated, transferring can be prudent. Banks, counterparties, and internal policies often require consistency between the reservation holder and the party submitting formation documents or paying fees. Aligning the reservation with the intended filer reduces mismatch errors, routing issues, and document rejections.

Transfers also reduce operational risk. Teams change, contractors rotate off projects, and individual reservation holders may depart an organization. Leaving control of the reservation with someone no longer involved can complicate timing. Transferring early to the long-term responsible party keeps the process on track.

Finally, because the Texas Secretary of State maintains public records, filing Form 506 provides clear, official notice of who controls the reservation. Accurate records support communication, billing, and faster processing across subsequent filings.

When Would You Use a Form 506 – Notice of Transfer of Reservation of an Entity Name?

Use Form 506 any time an active Texas name reservation must move to a different person or entity before it expires. This is common when the initial reservation was a placeholder, and a new party will handle formation or foreign registration. Representative use cases:

• Founder to parent company or holding company.
• Law firm or filing service to the client.
• Holding company to subsidiary or designated organizer.
• Seller to buyer in an acquisition or carve-out.
• Consultant or agent to the beneficial owner once approvals are complete.
• Existing entity to a newly formed vehicle as part of a reorganization.

Timing matters. The reservation must be active on the date the state accepts the transfer. Transferring does not add time; it only moves remaining days. If the expiration is near, file the transfer promptly and consider whether to pursue a renewal (subject to Texas procedures). Filing offices process in queue order, so waiting until the last days risks an unintended lapse if a deficiency or delay occurs.

Transfers help with multi-state or staged rollouts. If different teams manage different jurisdictions, put the Texas reservation under the person or entity responsible for Texas filings to prevent coordination errors. This is especially helpful when synchronizing foreign registrations or a phased brand launch.

Edge considerations:

• If the transferor is merging or dissolving, complete the transfer before those events if practical. Post-merger or post-dissolution authority can be harder to document.
• If the transferee entity is not yet formed, transfer to an individual organizer or an existing parent entity, so that contact details are valid, and mail is received.
• If you change branding midstream, transfer the existing reservation to the right party, then reserve any new name separately. A transfer cannot change the reserved name.

In short, file Form 506 whenever the party that will submit the next filing under the reserved name is not the current reservation holder, and you want a clean chain of authority.

Legal Characteristics of the Form 506 – Notice of Transfer of Reservation of an Entity Name

Form 506 is a state filing that updates the official Texas record of the reservation holder. Once accepted, the transferee has the exclusive right to use the reserved name on Texas formation or registration filings for the balance of the term. The reservation number, file date, and state acknowledgment anchor the change in the state’s records.

Key legal points

• Not entity formation or registration: The transfer does not create a business, authorize operations, or qualify a foreign entity to transact in Texas.
• Not IP protection: It grants no trademark or service mark rights and does not prevent third-party use outside the state business filings context.
• Does not fix naming defects: If the reserved name violates naming rules or includes restricted terms, a transfer does not cure those issues. They must be addressed when you file for formation or registration.
• No term extension: The expiration remains the same as the original reservation; transfer only changes the holder.
• Public record change with legal effect: Agencies, banks, and counterparties may rely on the state’s acknowledgment as evidence that the transferee now controls the reservation.

Authority and governance matter. If the transferor is an entity, the signer must have authority to assign the reservation. Internal approvals (e.g., board, member, or manager resolutions) may be required by governing documents or policies, even if not submitted to the state. Obtain and retain them to prevent later disputes.

Multiple transfers are allowed during the term, but each requires its own filing and acceptance. All transfers track the original expiration unless the current holder successfully renews in accordance with Texas procedures.

Because filings are public, assume names and addresses provided will be visible. Use accurate legal names and reliable mailing addresses so state correspondence reaches the right person or department.

How to Fill Out a Form 506 – Notice of Transfer of Reservation of an Entity Name

1. Confirm reservation status.

• Locate the reservation number, the exact name as reserved, and the expiration date. Ensure the reservation is active; if time is short, prioritize the transfer and consider a renewal plan.

2. Identify the exact reserved name.

• Enter the name exactly as reserved, including punctuation, spacing, capitalization, and entity suffix (e.g., LLC, L.L.C., Inc., LP, PLLC). Even minor deviations can cause processing issues.

3. Provide reservation details.

• Insert the reservation number and, if requested, the original filing date and current expiration date consistent with your acknowledgment.

4. Name the transferor (current holder).

• Provide the full legal name, entity type (if applicable), and mailing address. If the transferor is an entity, confirm and list an authorized signatory’s title.

5. Name the transferee (new holder).

• Provide the full legal name, entity type (if applicable), and a complete mailing address. Choose the party that will actually handle the next filing step so communications are properly routed.

6. State the transfer.

• Include a clear assignment statement transferring all rights in the reservation to the transferee for the remainder of the term. Keep it concise.

Example: “The undersigned transferor assigns and transfers to the transferee all right, title, and interest in the entity name reservation identified herein for the balance of the reservation term.”

7. Sign the form.

• The transferor must sign. If the transferor is an entity, a duly authorized individual signs and includes their printed name, title, and date. Notarization is generally not required.

8. Prepare payment.

• Include the correct filing fee using an accepted payment method for your chosen submission channel. Incorrect fees or payment details commonly cause delays.

9. Submit the filing.

• File with the Texas Secretary of State via an approved method (e.g., online, mail, fax, courier, or in-person). Choose a method that meets your timeline and retain copies of all materials and proof of payment.

10. Track confirmation.

• Monitor for acceptance or a file-stamped copy showing the transferee as the new holder. If confirmation does not arrive in a timely manner, follow up to resolve deficiencies or payment issues.

11. Plan next steps.

• Decide whether to proceed to formation or registration. If the expiration is approaching, plan a timely renewal per Texas procedures to maintain continuity.

Notes on parties, clauses, signatures, and schedules

• Parties: Clearly identify transferor and transferee with full legal names and mailing addresses; include entity type and jurisdiction if requested.
• Clauses: A short assignment clause is sufficient; the state records only the transfer, not private conditions.
• Signatures: The transferor must sign; include name, title, and date to evidence authority.
• Schedules: The form typically stands alone. If names or addresses exceed field limits, attach a clearly labeled page referencing the reservation number, if allowed.

Editor note: This form belongs to the Texas Secretary of State.

Legal Terms You Might Encounter

• Reservation holder: The party on record with the Texas Secretary of State who holds the exclusive right to use the reserved name for filings during the reservation period.
• Transferor: The current reservation holder who signs to assign all rights in the reservation.
• Transferee: The party designated to receive the reservation and become the new holder upon acceptance.
• Reservation number: The unique identifier assigned at the original reservation; it links the transfer to the correct record.
• Assignment (transfer): The written act by which the transferor conveys the reservation rights to the transferee for the remaining term.
• Effective date: The Texas Secretary of State’s file date for the transfer; from that date, the transferee is recognized as the holder.
• Authorized signatory: An individual with authority to sign for an entity transferor, such as an LLC manager, corporate officer, or general partner.
• Exact name: The reserved entity name as it appears in the reservation record, including punctuation and suffix; it must be reproduced exactly.
• Reservation term: The 120-day window (unless otherwise provided) during which the reserved name is held exclusively for filings. Transfer does not alter this term.
• Renewal: A separate filing, the current holder may submit to extend the reservation, subject to Texas rules. Transfer does not automatically renew.
• Filing evidence: The acknowledgment or file-stamped copy showing the transfer’s acceptance and the transferee as holder.
• Public record: The official, searchable state record of reservations and transfers.
• Corrective filing: A filing to correct errors in a prior transfer (e.g., wrong number or party name), if permitted.
• Consideration: Value exchanged for the transfer under a separate private agreement; it is typically not listed on Form 506.

FAQs

Do you need the reservation certificate to complete the transfer?

You generally do not submit it, but you must provide the exact reserved name and reservation number. Keep the certificate for your records.

Do both parties need to sign?

Usually, only the transferor signs. Any internal consents or agreements between parties are handled privately.

Can you transfer to an entity that is not yet formed?

Yes. You may transfer to an individual organizer or a parent entity, so that contact details are valid, and notices are received.

Can you change the reserved name as part of the transfer?

No. The transfer moves the existing reservation as-is. If you want a different name, transfer control and then reserve the new name separately.

Can you rescind or correct a transfer after submission?

If a mistake occurs, consult the corrective filing procedures. Often, a correction or a subsequent transfer can cure the error if you act promptly.

Will you receive proof of the change?

Yes. Expect an acknowledgment or file-stamped confirmation listing the transferee as the new holder.

Do you need a notary or witness?

Notarization is generally not required. Check current instructions to confirm.

Can a law firm, consultant, or registered agent sign?

They may sign if they are the current holder or are authorized to sign for the holder. Include the signer’s title for entity transferors.

What if the reservation has already expired?

You cannot transfer an expired reservation. File a new reservation and proceed under the new reservation number.

Can one reservation be transferred to multiple transferees?

A single reservation can only have one holder at a time. If multiple parties need control, designate one entity (e.g., a parent company) to hold it.

Does the transfer guarantee the name will be accepted at formation?

No. The reservation is a preliminary hold and does not override naming rules or regulatory approvals at formation.

Can the transferee be an out-of-state entity?

Yes. Provide accurate legal name, entity type, and mailing address, even if formed elsewhere.

Does the transfer impact trademarks, domain names, or brands?

No. Those items require separate actions. Manage trademark clearance and domain registrations independently.

Can you request a certified copy of the transfer?

Typically, yes, for an additional fee. Certified evidence is useful for closings or internal approvals.

What if you do not know the reservation number?

Look it up in your records or prior acknowledgment. If necessary, contact the filing office or your service provider to retrieve it.

Will the expiration date change if processing is delayed?

No. It remains anchored to the original reservation date. File early enough to absorb administrative lag.

Can you transfer more than once within the same term?

Yes, as long as the reservation remains active. Each transfer is separately filed and accepted.

What happens if the transferor’s signer changes before filing?

Update the signer to someone with proper authority at the time of filing and include their title.

Is the transfer public?

Yes. Names and addresses on the filing may be visible in public records.

Can the transferor attach conditions to the transfer on the form?

The state records only the assignment. Any conditions belong in a separate private agreement and are not enforced by the Secretary of State.

Does the transfer affect assumed names (DBAs)?

No. Assumed name filings are separate and are not transferred by Form 506.

Checklist: Before, During, and After the Form 506 – Notice of Transfer of Reservation of an Entity Name

Before signing:

• Confirm the reservation is active; note the expiration date.
• Gather the reservation number, exact reserved name, original filing date, and current expiration date.
• Verify the transferor’s full legal name and mailing address.
• Confirm the transferee’s legal name, entity type (if applicable), jurisdiction (if applicable), and mailing address.
• Identify the authorized signatory for the transferor and obtain any required internal approvals or resolutions.
• Review Texas naming rules relevant to your reserved name, including suffix and restricted terms.
• Select a submission method and prepare the correct fee and payment details.
• Calendar the expiration date and any planned renewal.
• If part of a transaction, align filing with the closing date and agree on when control passes.

During signing:

• Confirm the reserved name matches exactly, including punctuation and suffix.
• Double-check the reservation number and dates.
• Use a clear assignment clause transferring all rights for the remainder of the term.
• Have the transferor sign; if an entity, include the signer’s printed name and title and the signature date.
• Verify addresses and contacts; ensure the transferee’s contact is monitored.
• If attaching an extra page for long names or addresses, label it and reference the reservation number.

After signing:

• Submit with the correct fee via your chosen method; use tracked mail or electronic filing when timing is tight.
• Watch for acknowledgment or a file-stamped copy; follow up if not received timely.
• Circulate acceptance evidence to the transferee, counsel, and filing teams.
• Align formation or registration timing with the remaining term; file promptly if expiration is near.
• Prepare a renewal if planning extends beyond the current term.
• Store the signed transfer, acceptance, internal approvals, and related correspondence in your corporate or deal records.

Common Mistakes to Avoid Form 506 – Notice of Transfer of Reservation of an Entity Name

Misspelling or altering the reserved name.

• Consequence: delay or rejection. Copy the exact name, including punctuation and suffix.

Having the wrong party sign.

• Consequence: rejection. The transferor must sign; entity signers must have authority and list their title.

Incomplete transferee information.

• Consequence: return for clarification. Provide full legal name, entity type (if any), and mailing address.

Assuming the transfer changes reservation conditions.

• Consequence: planning errors. Transfer only changes the holder; it does not extend the term or cure naming issues.

Missing internal approvals.

• Consequence: governance disputes. Obtain required board, manager, or member approvals and keep them.

Using a different suffix format.

• Consequence: mismatch with the record. Mirror the suffix exactly (e.g., L.L.C. vs. LLC) as reserved.

Invalid or incorrect payment.

• Consequence: processing delays. Confirm accepted payment methods and amounts.

Filing too close to expiration.

• Consequence: loss of reservation if delays arise. File early and plan for renewal if needed.

Listing a DBA or variant name.

• Consequence: mismatch. The reservation protects only the exact reserved name.

Failing to notify the team after acceptance.

• Consequence: misaligned filings or duplicates. Share acceptance promptly.

Attempting to transfer an expired reservation.

• Consequence: ineffective filing. File a new reservation instead.

Ignoring restricted terms or approvals.

• Consequence: issues at formation. Address regulatory approvals early if your name includes restricted terms.

Not retaining proof of filing.

• Consequence: difficulty proving holder status. Keep the acceptance or file-stamped copy.

What to Do After Filling Out the Form 506 – Notice of Transfer of Reservation of an Entity Name

1. File promptly with the required fee and track the submission; watch for acceptance or a file-stamped confirmation.
2. After acceptance, distribute the confirmation to the transferee, internal filing team, counsel, and any service providers so that all subsequent filings use the transferee as the holder.
3. Review the acceptance for accuracy (name, reservation number, holder details). If something is wrong, contact the filing office to correct or refile as needed.
4. If plans shift again—new subsidiary, different counsel, or deal changes—submit another transfer so the correct party holds the reservation before filing formation or registration.
5. Align formation or foreign registration with the remaining term and calendar any renewals if more time is needed.
6. Coordinate multi-jurisdiction strategy to maintain brand alignment and ensure the Texas holder matches the team responsible for Texas filings.
7. Store all records—signed transfer, internal approvals, acceptance evidence, and correspondence—in your corporate minute book or deal files to support diligence, banking, and audits.