Form 205 LLC: Everything You Need to Know
Form 205 LLC is required if you want to form any type of LLC in the State of Texas and operate a business or hold assets.3 min read
Form 205 LLC is required if you want to form any type of LLC in the State of Texas. The Texas LLC can be formed to operate a business, i.e. sell products or services, or hold assets, i.e. real estate investment company. Unlike corporations, LLC owners are called members. An LLC can operate as a single-member LLC having one owner, or as a multi-member LLC having two or more owners. The owners can be individuals or businesses of any kind. There are certain requirements that must be met in order to property form your Texas LLC, and its’ important for you to be aware of the requirements, as well as the forms necessary in order to begin conducting business in the State of Texas.
What Is Included in Form 205
- Business name
- Registered agent and office
- Governing authority
You’ll want to provide your business name and type of business (i.e. Series LLC, PLLC, or LLC). But before choosing a random name, you will first need to ensure that the name you want to use is available. If you enter this business name, and the name is either not available or if it’s similar to that of another name, then your registration will be rejected. Therefore, you’ll want to conduct a business entity search beforehand to prevent this from happening. You can also call the Texas Secretary of State’s office at (512) 463-5555 or e-mail email@example.com to find out if your business name is available.
There are several other requirements when choosing a name, including the fact that your name must include the LLC business designator. There is some flexibility in terms of including the designator at the end of your business name; you can include variations of the designator, including L.L.C., LLC, L.C., Ltd. Liability Co., and other related variations of these terms.
You cannot use terms that would imply that your company operates as another type of business structure, including terms like corporation, trust, incorporated, etc.
Once you’ve chosen your business name, you can reserve that name for up to 120 days by submitting an Application for Reservation of an Entity Name (Form 501) to the Texas Secretary of State. The filing fee is $40.
Registered Agent and Office
You will need to obtain a registered agent for your LLC. The agent can be a domestic or foreign business that is authorized to do business in the State of Texas, or alternatively, it can be an individual who resides in the State.
The LLC cannot act as its own registered agent. However, a member of the LLC can operate as the registered agent, so long as that member has a physical address in the State. This means that if the member is a person, he or she must reside in the state. If the member is a business, that business must be registered in the state, and have its own physical office location (apart from the LLC office location) where it can receive legal papers. Furthermore, the agent must explicitly consent to being the agent, i.e. signature on Form 205 is required.
The registered agent, if a business, must have a physical office address within the State. The office address must be open during normal business hours. Therefore, if legal papers need to be hand delivered, this office address must be open during these hours, and someone must be at the address to receive and sign for such papers.
Form 205 must also include how the LLC will be managed, and whether it will be managed by the members (member-managed) or managed by a manager (manager-managed). If the LLC chooses to hire a third party to act as the manager, the manager’s name and address must be included in the document.
While Form 205 allows you to create an LLC for any general purpose, the IRS might require that you provide an actual purpose for forming the LLC, particularly if you want to obtain licensing, or other tax-specific advantages.
If you need help forming a Texas in LLC, or if you need assistance filling out Form 205, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.