Forming an LLC in Texas is not complicated. Follow these simple steps to form a company and get ready to start doing business in your state.
Step 1. Name your LLC
You need to give your business a name. As mentioned above, the name must include one of the following terms:
- limited liability company
- Co., Ltd.
- LLC
- L.C.
- Limited company
It must also be a unique name that passes the entity search test on the Secretary of State's website. He cannot form his LLC with the same name as an existing entity doing business in Texas. You can also exclude names that look or sound similar to the name of your existing business, especially if you operate in your industry or region. Seemingly similar names can cause trademark issues. Also, competing with another company with the same name is bad for business and confusing for consumers, which is never a good thing.
Just as names must contain certain terms, they cannot contain certain terms. These include:
- Ministry of Finance
- State Department
- F.B.I.
- C.I.A.
- Other official terms
You can use terms such as bank, university, lawyer, doctor, etc. as long as they meet Texas government requirements for organizations. Please meet these conditions first before adding them to your Texas LLC.
Buy an LLC domain name (optional) in Texas
You may want to consider an online presence for your business because you can associate your website and email address with your LLC. This increases your company's visibility online and makes it easier for potential customers to find you on the Internet.
Make sure to choose a domain name that matches or is close to the name of your LLC. After doing this, you will need to purchase a domain from a domain registrar. A domain registrar is a company that facilitates the process of registering and managing Internet domain names. You can choose to purchase your domain name from many of the best domain registrars on the market.
Step 2. Hire a registered agent
As you already know, you need a registered agent to open an LLC in Texas. Now is the time to hire someone. Select a registered agent with an address in Texas. This person must be able to be reached regularly at that address during business hours for personalized legal document service.
Who can be a registered agent in Texas?
If you are an individual residing in Texas or an organization with an LLC registered in Texas and a business office at the same address as the entity's registered office, you may be eligible to serve as a registered agent. I can agree. In addition, an officer, owner, employee, friend, or family member may also act as a registered agent as long as he or she is a Texas resident with a physical address in Texas.
Alternatively, an entity may contract with a service provider or another business entity to provide registered agent services. It is important to note that an entity itself cannot act as its own registered agent.
Step 3. File Texas Certificate of Incorporation — Limited Liability Company
Below are links to the forms and associated filing fees required to file for an LLC.
- Form 205: The “Certificate of Incorporation – Limited Liability Company” is the most important document you need to get your LLC off the ground. It can be downloaded or completed and submitted online through SOSDirect. The application fee is $300.
- Form 304: The “Application for Foreign Limited Liability Company Registration” form must be filed by LLCs that are formed outside of Texas and wish to operate within the state. Please access this form. The application fee is $750.
Completed physical forms must be mailed in duplicate to PO Box 13697, Austin, Texas 78711-3697.
Additional costs associated with taxes, filing fees, hiring a registered agent, etc. can range from $100 to $1,000. In Texas, LLCs do not file annual reports or pay reporting fees, but they are subject to state franchise tax.
How to fill out the certificate of establishment
When providing information about your LLC, you must have the following details ready to accurately complete the certificate of incorporation:
- LLC name: Enter the full legal name of your LLC, including names such as “LLC,” “Limited Liability Company,” or “Limited Liability Company.”
- Registered agent: Include all information, such as the personal or business name, address, and telephone number of the registered agent assigned to the LLC. Be sure to also obtain written consent from your registered agent.
- Management structure: Specify whether the LLC is member-managed (managed by the members) or manager-managed (managed by an appointed manager). List the names of administrators. Include the administrator's address. Since this is public information, you may use a PO Box if you wish.
- the purpose: Briefly describe the purpose or nature of the LLC's business activities. This may be common.
- Mailing address: If your mailing address is different from your principal place of business, enter the address where official correspondence and important tax documents will be sent.
- Supplementary provisions/information: You have the option to include any additional provisions you wish to include on your LLC return. Generally, leave this section blank unless your attorney tells you otherwise.
- interval: In Texas, LLCs exist in perpetuity, but you have the option of specifying whether or not they are formed during a specific period of time.
- LLC organizer: The organizer is the appointed person or entity responsible for preparing and filing the necessary documents for the LLC with the state and other relevant agencies. The organizer plays a key role in initiating and completing the legal requirements for LLC formation and ensuring compliance with state regulations and guidelines.
- Formation date: Please state the date on which the LLC was officially incorporated, incorporated, or effective. You can choose to do this as soon as you file it with the Secretary of State, or you can choose “future event or fact,” but not more than 90 days after signing.
- execution: After careful consideration, confirm by date and signature that everything on the form is correct, including the consent of the registered agent.
Once your application is submitted, you will receive a stamped and approved Certificate of Formation from the State of Texas shortly (10-12 business days if you apply online).
What if I need to amend my Certificate of Incorporation?
An LLC's certificate of formation only needs to be filed once during the initial formation process. However, if any of the information contained in the original certificate of incorporation needs to be updated, changed, or expanded, the LLC must notify the State of Texas by filing a certificate of amendment.
To report these changes, you must file a certificate of amendment with the Texas Secretary of State and pay the associated fees. It is important to keep your certificate of incorporation up to date. This is because it may affect your ability to obtain a Certificate of Fact, which is official evidence of a company's ability to do business in Texas. Failure to comply with state requirements and keep your LLC information up to date can severely limit your LLC's potential.
Step 4. Obtain a Texas LLC Employer Identification Number (EIN)
You can obtain an EIN for free. This is a 9-digit number given to your Texas LLC by the IRS. This number serves as an identification number when obtaining a bank account, credit account, or filing taxes. This is an important part of a Texas LLC.
Apply for a free EIN directly with the IRS. This application only takes a few minutes and your EIN will be issued immediately.
Step 5. Create an LLC operating agreement
All Texas LLCs are required to have an operating agreement in place that outlines how the company will run its day-to-day operations. Although this is an internal document, it is an important document for running your business. An operating agreement provides an overview so that members and managers are not confused about who does what in the business. Ultimately, it helps reduce conflict.