File for LLC in Texas: Everything You Need to Know
To file for LLC in Texas is the first step in getting your business up and running legally in the state.3 min read
To file for LLC in Texas is the first step in getting your business up and running legally in the state. Filing involves planning and a series of steps to make sure your company is in compliance with the state's requirement for forming an LLC.
Steps to Form a Texas LLC
Step 1. Choose a name for your LLC.
- Do a thorough search of the chosen name to be sure it's suited to the type of business you will be operating.
- Make the name stand out from the others.
- You will not be allowed to duplicate the name of an existing business. The approval of the name is determined on a case-by-case basis by the Texas Secretary of State.
- The name cannot use restricted words, such as an attorney, university, or bank without the appropriate paperwork filed with the state.
- The name also cannot use prohibited words such as Secret Service, FBI, CIA, or Treasury.
- When naming the business, one of the following must be included: L.L.C., LLC, or Limited Liability Company.
Step 2. Check Name Availability.
- Visit the Texas Secretary of State website and use the search tool to find out if the name is available.
- Once you determine the name is available, check with a site that provides domain names to find out if the URL for your business name is available.
- You may want to have a business website for your business. Buying the domain name prevents anyone else from using it.
Step 3. Reserve the LLC business name.
- The name is reserved through the Secretary of State office.
- A name may be reserved for 120 days. You must submit Form 501 to the Texas Secretary of State; this is an Application for Reservation or Renewal of Reservation of an Entity Name. The form can be filed online or sent via the United States Postal Service.
- If filing online, the company name, the name(s) of the business owners, and a description of the business are required.
- You have the option of filing your business under an assumed name versus your legal name. To do so requires that you file an Assumed Name Certificate.
Step 4. Trademarking the business name.
- For a business name that is creative, consider registering for a trademark.
- Having the business name trademarked makes it stand out from competitors. It also protects the business from trademark infringement.
- Visit the United States Patent and Trademark Office (USPTO) to file the appropriate form for a trademark.
- Consult with an attorney about trademarks to guide you through the process to secure the trademark and avoid any legal liability.
Step 5. Determine the members and board members.
- Owners of the LLC are considered members. An LLC may have a single member or a board of members.
- Those authorized to act on behalf of the business have governing authority and are considered managers. A manager does not need to be a member of the LLC.
- Decide who and how many will be in a governing position prior to filing the Certificate of Formation.
Step 6. Appointing a registered agent.
- A designated registered agent works on behalf of the LLC by agreeing to process legal papers sent or received by the LLC.
- The registered agent must be either a company authorized to do business in Texas or a resident of Texas.
- The agent must consent by electronic or written form to the appointment. Verbiage for the Acceptance of Consent form 401-A can be found at the Secretary of State website. It is not necessary to file the form with the state.
Step 7. Filing the Certificate of Formation.
- File for a Certificate of Formation (Form 205) with the state. The form will ask for names, address, registered agent information, business purpose, and a dissolution date, if applicable.
Step 8. Obtaining required business licenses.
- Comply with any state, local, or federal regulations to operate the LLC. Contact the county clerk's office for information about any permits or licenses needed for your business.
Step 9. Applying for an Employer Identification Number (EIN)
- Apply for an Employer Identification Number at the IRS website.
Step 10. Creating an Operating Agreement.
- The agreement is not a requirement in Texas. It is recommended as it outlines the policies and procedures of the LLC.
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