How to Create an LLC in Texas

Want to know how to create an LLC in Texas? It’s not really an overly complicated process. That said, there are a few things you’ll need to understand before you get started. Understanding the process and what exactly makes an LLC will help set you on the right patch from the beginning.

How to Start an LLC in Texas

  • Come up with the name your LLC will use.
  • You will require a registered agent in Texas to create an LLC.
  • A Certificate of Formation will need to be filed with the State of Texas so that the LLC can be officially registered.
  • It is a solid idea to acquire an operating agreement, though this is not a requirement in Texas.
  • Business owners needs to get an EIN from the IRS (free of charge). Any business owner will need an EIN, which you can get directly from the IRS for free.

This can be done by filing all required fees as well as meeting any and all formation or naming requirements.

What Is an LLC?

A business that can take on multiple smaller enterprises is call a limited liability company or LLC. This classification allows owners to limit their personal liability where financial company matters are concerned. Essentially, should someone seek legal action against the company, they won’t be able to come after the personal assets of the owner. The owner is actually only responsible (in a financial sense) for whatever investment they have in the business itself. By forming an LLC, you also provide the company with a flexible way to choose how to run itself.

How to Create a LLC in Texas

State and federal laws can offer several advantages for LLCs come tax time. An LLC does not actually pay any taxes itself. Instead, the net income of the business is “passed through” to all owners, who in turn will report that income on their personal tax forms. In Texas, LLCs can be formed easily and inexpensively. LLC’s are cheap and easy to form in Texas.

What are the Naming Guidelines for Your LLC?

It is important to research your desired name to make sure that it suits your company’s vision and can be easily searched for by your soon-to-be clients. Whatever name you choose, it has to include “Limited Liability Company,” LLC, or L.L.C. If you want your name to have any restricted words, such as attorney, university, or bank, you will need to fill out extra paperwork, which could demand the assistance of a doctor, lawyer, or other licensed professional to be involved with your LLC. This is because prohibited words can sometimes confuse your LLC’s name with that of a state or federal agency, like the Secret Service or Treasury.

You’ll also need to ensure that your name hasn’t been taken by someone else. Do this by registering a Texas Secretary of State account free of charge and performing a name search. You can make your account online and can pay any state fees or file business forms directly from the website. Once you’ve locked in the name, make sure to look online for the name’s availability on domains, and secure your own website. You may not be ready to launch the website right away, but you should sit on the domain name so no one else can take it from you.

Search Assumed Business Names

The public or "assumed" name of your business may not match the legal name of your registered LLC. Your company’s “assumed” name, or public name, cannot be the same as the exact legal title for the LLC you registered. This is the name that will be used in the basic daily operations of the business. This is the same as DBA (doing business as) name. For example, a company with the registered LLC of “Pizzatown LLC” may actually open their shop under the name “Fred’s House of Pizza.” For that public name, you must do your research to make sure there are no duplicates of that name in the market.

There are no legal restrictions on assumed names; any company can use the same one. However, this will likely be confusing to potential customers if you are actually entirely different businesses.

Choosing the right name and DBA for your company is critical. It affects searchability, marketing, and familiarity with potential customers. Do your research before filing an LLC.

If you need help with creating an LLC, you can post your legal need on Up Counsel’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, Stripe, and Twilio.