LLC Fees Texas: Everything You Need to Know
LLC fees Texas business owners have to pay start at $300. An LLC is a business that offers the limited liability of a corporation combined with the management methods of a partnership; therefore, it is sometimes referred to as a "hybrid" business model. 3 min read
LLC fees Texas business owners have to pay start at $300. An LLC is a business that offers the limited liability of a corporation combined with the management methods of a partnership; therefore, it is sometimes referred to as a "hybrid" business model.
How to Form an LLC in Texas
It's easy and quite inexpensive to form a Limited Liability Company (LLC) in Texas. Here are the necessary steps:
- Select a name
- File a Certificate of Formation
- Select a Registered Agent
- Complete an Operating Agreement
It's important to obey all other tax and regulatory requirements. Keep in mind that there's no requirement for LLCs to file annual reports with the Texas Secretary of State (SOS). All foreign LLCs must register with the Texas SOS.
Choose a Name for Your LLC
When selecting a name for an LLC do some research to ensure that the name is appropriate to the business endeavors and that it is easily searchable. Texas law requires that the name of an LLC must include one of the following terms:
- Limited Liability Company
- Limited Company
Please note that term "Limited" can be shortened to "Ltd." or "LTD." The term "Company" can be shortened to "Co."
Use of certain words or terms (e.g., Attorney, University, Bank, etc.) in the name of the LLC will require additional paperwork to be completed and may also require a licensed party or entity to be included in the LLC.
Names of LLCs may not be named after federal agencies (e.g., Secret Service, Treasury, FBI, etc.). Certain words or terms are unacceptable to use in the name of an LLC because they may be confusing and are therefore prohibited.
All LLC names must be unique. Every LLC name on file with the Texas SOS must be different than all other business entities on record. Check LLC name availability by visiting the Texas SOSDirect website.
Business names can be reserved for up to 120 days by filing Form 501 with Texas Secretary of State.
In order to reserve a domain name, it's important to verify whether an LLC name is available. Even if there's no current plan to create a website, it's recommended that you purchase a domain name. This will help prevent others from obtaining your preferred domain if you change your mind later on.
File a Certificate of Formation
A Texas LLC is officially established when Form 205 (Certificate of Formation) is filed with the SOS. Filers with the SOS will need to supply a name and address associated with the LLC's registered agent. Additional required information includes:
- Deciding on whether the LLC will be manager-managed or member-managed.
- The name and address of the LLC's governing person(s).
- The name and address of the LLC's organizer.
- The effective date of the certificate.
The Certificate of Formation can be filed online at SOSDirect or by mail. Upon receipt, forms and documents that are submitted for filing and processing are usually handled within three to five business days. All expedited processing requests must be submitted through a written application along with an additional fee.
The Certificate of Formation filing fee is $300.
Appoint a Registered Agent
An agent for service of process is required by Texas state law for all LLCs. In case of legal action, an agent for service of process is a person or entity that will accept legal papers on the behalf of the LLC. An agent for service of process is more commonly known as a registered agent.
All business entities and persons that are registered agents for LLC's must live in the state of Texas or be granted authorization to operate within the state. A physical street address within the state of Texas is required for all registered agents. A registered agent can't be the LLC itself.
Form 401-A must be filed with the Texas SOS in order to begin service as a Registered Agent. Form 401-A is referred to as the Acceptance of Appointment and Consent form. The Registered Agent needs to sign this form and submit it to the Texas SOS to be filed.
Prepare an Operating Agreement
All LLCs that have more than one member should also have a limited liability Operating Agreement completed among the members. It is highly recommended that all LLC's doing business in Texas complete an Operating Agreement. An Operating Agreement does not have to be completed when filing the Certificate of Formation.
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